The Republican reports from Massachusetts. "New home construction for 2006 more than halved the 100-home- a-year average seen here for more than a half-century. The Building Department issued 49 building permits for new single-family dwellings in 2006. Westfield, geographically one of the largest cities in the commonwealth with 47.33 square miles, has been averaging about 100 new homes a year for more than a half-century, city officials have said."

"'There is no question there is still a lot of inventory left over from previous years,' said Community Development Director James M. Boardman. 'I think there is a sense that everything has settled down and I don't think anyone has moved into optimistic mode. What has plummeted is sales,' Boardman said."

The Boston Globe. "Banking regulators in Massachusetts and eight other states yesterday ordered Mortgage Lenders Network USA Inc. to cease its lending activity after the Connecticut company failed to fund mortgages that had been approved or even closed." "Such cease and desist orders are the strongest regulatory tools state governments can use to control or stop mortgage companies and other lenders."

"Company officials have blamed Mortgage Lenders' problems on increased defaults and the faltering housing market. Subprime borrowers had a delinquency rate of 12.5 percent in the third quarter of 2006, the highest in more than three years, the Mortgage Bankers Association reported last month."

From The Day in Connecticut. "Banking regulators in several states took action Friday that could result in tens of millions of dollars in fines against a troubled Connecticut-based mortgage lender that works primarily with people with poor credit. New York and Michigan officials were also expected to take action."

"The privately held company, which bills itself as one of the country's top subprime mortgage lenders, has a portfolio of $17.8 billion. Subprime borrowers had a delinquency rate of 12.5 percent in the third quarter of 2006, the highest in more than three years, the Mortgage Bankers Association reported last month."

"Several subprime lenders have fallen victim within the past year as housing prices dropped, mortgage amounts exceeded home values, loan volume declined and foreclosures and delinquencies increased, said David Olson, president of Columbia, Md.-based Wholesale Access Mortgage Research & Consulting."

"'The subprime continues to have a lot of problems,' said Olson, whose firm tracks the mortgage industry. 'I think it's difficult times for the next year, and we'll see consolidation at the larger firms.'"

The Providence Journal from Rhode Island. "Ronald Danis thought he got a good deal when he bought a $252,000 house with no down payment. Danis was living with his family of three in a two-bedroom apartment in West Warwick. The rent was $800 a month. So, when his wife became pregnant again, they began looking at houses. 'We felt, why waste the money on rent?' Danis recalled."

"He bought a three-bedroom ranch in a cul-de-sac in a blue-collar neighborhood in Coventry in April 2004. The price was $252,000. The mortgage lender financed 100 percent of the price, plus fees and closing costs. Danis even got back his $2,000 deposit at the closing."

"'They told me this was the best mortgage for [me],' he recalled. 'I took their word for it.'"

"But a year later, Danis decided it was not such a great deal. He ran into trouble paying his $2,000-a-month mortgage and eventually the lender threatened to foreclose."

"After years of rising home prices, Rhode Island is now experiencing a run-up in home-loan delinquencies. More than 5,600 home loans made in Rhode Island were delinquent during the third quarter of last year, an increase of 46 percent from the same period in 2005, according to the latest survey by the Mortgage Bankers Association."

"'New England looks like the roughest area of the country after the Midwest,' said Karl Case, a housing economist at Wellesley College. 'It’s expensive up here, [home] prices are high, there are a lot of exotic mortgages and people are stretching themselves.'"

"The shift has been particularly dramatic in Rhode Island, which in 2004 ranked first in the nation for house-price appreciation. As prices climbed out of reach, prospective buyers stretched their household budgets and lenders offered new, riskier mortgages to allow borrowers to buy houses that they otherwise could not afford."

"'Lenders turned more aggressive,' said economist Mark Zandi, 'because borrowers wouldn’t have qualified for loans otherwise.'"

"Ron Danis knew his credit score was low because he’d gotten into trouble with credit cards in his 20s. But for the last 10 years, he’d had a steady job. He said a friend who was a real estate agent recommended a mortgage broker who suggested an 80-20, or 'piggyback' loan, which would allow Danis to borrow more money by splitting the mortgage into two: 80 percent based upon the prime lending rate and a second, 20-percent loan at a higher, 'subprime' rate."

"The broker arranged for the loans with Option One Mortgage, the dominant subprime home mortgage lender in Rhode Island. The Jacksonville, Fla.-based lender originated 3,239 loans for single-family houses in Rhode Island in 2005, according to data from the Mortgage Bankers Association."

"The interest rate on Danis’ first mortgage was 8.44 percent. The rate on the second mortgage was 11.25 percent. Together, the payments on the two mortgages came to $2,000 per month. The bigger of the two mortgages allowed Danis to pay 'interest only' for the first two years of the loan."

"'We didn’t know any better,' said Mary Danis. 'Now, we’re just kicking ourselves.'"

"Shortly after he bought the house, Mary Danis, who was having a difficult pregnancy, stopped working and their income dipped. He fell behind on his mortgage payments. He didn’t want to sell the house, but even if he did, it wouldn’t have gotten him out of the hole. In 2005, his house was appraised at $225,000, almost $27,000 less than his mortgage."

"On Nov. 6, 2006, a legal notice ran in The Providence Journal stating that the Danis family’s house 'will be sold at public auction on November 20, 2006 at 4:00 PM.' It was among dozens of foreclosure notices that filled the newspaper’s classified ads almost daily. The lion’s share of the foreclosures appear to be in Providence, where the mandatory legal notices that ran in The Journal last year jumped nearly 300 percent, according to a Journal analysis."

"'I see 25 families a week, easily,' said Christopher Lefebvre, a bankruptcy lawyer in Pawtucket. 'To be a homeowner today — to be able to afford that privilege — is a very costly thing. The fact of the matter is, the average family of four, even those making $75,000 or $80,000 a year … can’t afford the homes they want to buy.'"

"On Dec. 4, Lefebvre filed a Chapter 13 bankruptcy petition for Danis. At the time he filed, the balance on Danis’ two mortgages had climbed to $260,678, according to court documents. Under the Chapter 13 bankruptcy plan, Danis agreed to pay, over time, the arrearages on his mortgage and all of his other debts."

"If he sticks to the plan, Lefebvre said, Danis will be able to get out of Chapter 13 in just under three years. 'As long as I make my mortgage payments,' Danis said, 'the house is still mine.'"