The Houston Chronicle reports from Texas. "Is Houston facing a slowdown in the condo market? One sign could be that condo converters who turn apartments into for-sale units are offering buyers valuable perks to purchase condos in their buildings."

"The developer of Rise, a Midtown building that was converted last year is offering free association dues for a year and help with closing costs. A project near the Texas Medical Center is promoting 100 percent financing on its units, which started out as apartments and were converted before the development was completed. And the Oak Lane Garden Condominiums near River Oaks touts 100 percent financing, as well as a $2,500 incentive for Realtors."

"Developer Mike Atlas said he's sold about half of the 56 units in one section of the Oak Lane Garden Condominiums and sold the remaining 160 units to a company planning to build new apartments there. 'In the condo market, you have to be patient,' he said."

"Houston's had its own boomlet, and competition is mounting. Still, no one's predicting a Florida situation, where many conversion projects are being turned back into apartments. Developments that sell best have something extra, said Sandra Gunn, a real estate agent active inside the Loop."

"'Absorption has slowed down some, but people still want to buy that product,' she said."

"A federal judge sentenced Lawrence Randall Benham Friday to a little more than eight years in prison in connection with his guilty plea to wire fraud and mail fraud. U.S. District Judge Ewing Werlein Jr. also ordered Benham to pay restitution of $412,800."

"Benham was convicted of running a mortgage fraud scheme in which he found homes for sale and then used others with strong credit as buyers of the properties for his benefit, prosecutors said. Prosecutors said Benham found homes for sale and then used the credit and identifying information of so-called 'straw buyers' on loan applications and also exaggerated the buyers' incomes. He then arranged for the straw buyer to buy the home at an inflated price, prosecutors said."

"The indictment alleged that Benham was able to take out more than $8.9 million in loans in other people's names. Benham admitted to making between $1.5 million and $2 million via mortgage fraud since 2002 and using the money for his business and to buy a Land Rover and a plasma TV, among other things."

The Dallas Morning News. "Thanks to relaxed lending standards, in recent years borrowers with bad credit, such as a bankruptcy or a delinquent loan on their record, found it relatively easy to get home mortgages. Such 'subprime' borrowers generally have to fork over higher interest payments to compensate the lender for the added risk of default they represent."

"So lots of subprime borrowers kept their house payments lower by taking out exotic mortgages such as adjustable-rate, interest-only or negative-amortization mortgages. Now, with interest rates and home foreclosures rising, the lending industry is dealing with the fallout of its creativity."

"'It's tightening up a lot,' said Eddie Carmona, branch manager at Homewood Mortgage in Carrollton, a mortgage broker that deals with subprime borrowers. 'Almost every single subprime lender has done dramatic changes. It's all recent.'"

"Gary Akright, a mortgage broker in Dallas, said tougher requirements for a down payment recently priced one of his credit-challenged clients out of a home purchase. 'The loan program was going to allow for 5 percent down, and they just came down with new guidelines to require 10 percent down,' Mr. Akright said. 'It took him out of being able to purchase.'"

"Mr. Carmona said down payment requirements are the biggest change he's seen. 'Before, you didn't have to bring a down payment,' Mr. Carmona said."

"Other changes: Higher credit scores. Previously, borrowers with a FICO credit score as low as 570 (out of 850) could qualify for a single loan financing 100 percent of their home purchase, Mr. Carmona said. 'Now, across the board, it's jumped up to a 600 FICO score for an 80/20 loan,' Mr. Carmona said."

"During the housing boom, borrowers and lenders took comfort in the fact that home prices rose and rose, with no signs of slowing. But with home prices falling in many parts of the country, that safety net has been eliminated."

"Unfortunately, some lenders who made those risky loans were driven by their own self-interest, Mr. Carmona said. 'I believe some loan officers are much more concerned with producing than with the client's best interest,' he said. 'There is a big difference between the ability to qualify and the ability to afford, and there are borrowers and loan officers who ignore that simple truth.'"

"Investors who buy those bonds are among the forces creating the current backlash against lenders. 'Investors are starting to look at their books with a more jaundiced eye and seeing loans aren't performing the way they want,' said Keith Gumbinger, an analyst at HSH Associates, which publishes mortgage information. 'Investor demand for certain of the most liberal products is drying up to a degree.'"

"Locally, Sebring Capital Partners LP, a Carrollton-based subprime lender, said it was shuttering its operations. The company's general counsel, Michael Waldron, attributed the company's demise to 'a combination of market conditions.'"

"Mr. Carmona said he's often had to tell clients that he 'personally would not help them get the loan for which they could qualify. I will instead show them how to better position themselves in the next six to 12 months to comfortably afford their home when they are truly ready,' he said. 'I might lose a commission here and there because of this, but I have found that the referrals I get because of this stance are really strong.'"