The St Petersburg Times reports from Florida. "Nearly 50 buyers paid thousands of dollars apiece last year to reserve a condo at the Seaside Villas at Gulfport, a 121-unit complex along Boca Ciega Bay that was scheduled to be completed by August. So far, though, the only people living there have been squatters, who moved into the property after the last unpaid subcontractor pulled out several months ago."

"Last month, lenders sued to foreclose on three waterfront projects that developer John Loder, architect Stephen Spencer and various partners allegedly defaulted on in Pinellas County."

"The list of casualties is long. Among those allegedly owed money are dozens of subcontractors, condo buyers, secondary lenders and the county's property tax collector. Hundreds of former tenants were removed to make way for the renovations."

"'I would have loved to buy my unit, but the price was twice what I felt it was really worth,' said former Snell Isle Club resident Cheryl Harrison. The club's new owners wanted more than $400,000 for her three-bedroom, $970-a-month apartment."

"Fremont Investment & Loan - a Brea, Calif., bank, alleged that its loans went into default when Loder and his partners failed to pay subcontractors, property taxes, utility bills and certain insurance premiums. The partnership also missed promised completion dates and minimum sales targets. On-site sales offices and model condos were shuttered."

"Earlier this month, Fremont alleged, the South Pasadena property was beset by trespassers, exposed wiring, broken windows, asbestos warnings, open or missing doors, dangerous balconies, and dozens of washer-dryers left sitting in a parking lot. 'The project is in an abandoned state,' Fremont wrote."

The Herald Tribune. "In 2004 Kevin Ward bought a deteriorating hive of apartments near the Venice airport and converted them into 20 affordable condominiums, his first play in Florida real estate. Five sold in one day. In less than a year he flipped the entire building."

"Ward doubled-down, pitching two more projects far more ambitious than the first, with some 3,000-square-foot units carrying $1.5 million price tags. Today, both are at a standstill."

"'We'll probably be back this time next year with a new project,' said Ward. 'We think the world will be a little bit better then.'"

"It's a familiar story these days. Building and planning officials across the region confirm they're seeing growing numbers of plans like Ward's being shelved or delayed."

"For Ward, the market shift has pinned him between property owners who refuse to sell and a bank that's reluctant to loan him money. Since the market downturn, appraisals of the six properties that make up the 1.5-acre Kelley's Way site have come in about 25 percent below what the sellers are asking, Ward said. The bank refuses to lend any more than the appraisal."

"'I'm trying to say this nicely: We're not proceeding forward based on what some of the sellers think they should be getting,' Ward said. 'Was that nice enough?'"

"Of his own hassles, Ward speaks gratefully, saying they forced him to do what so many of his competitors have done and slow down. 'If I decided to build a year ago, I'd be in trouble,' Ward said. 'I'm grateful for my dumb luck.'"

The New York Times. "It was a simple pitch: Investors would put little to no money down and take out construction loans that a developer would use to build modest homes in a fast-growing stretch of Southwest Florida. When finished, the homes would be flipped for tidy profits of $30,000 to $40,000 apiece."

"Work on the homes has come to a halt, leaving 482 investors with half-built houses and thousands of dollars in construction liens. Coast Financial Holdings, which owns the bank that made the loans, has disclosed that $110 million, or a fifth of its total loan portfolio, could be troubled."

"'It was strictly a passive investment,' said Paul Matera, a retired contractor from West Islip, N.Y., who signed up for two houses and introduced dozens of others to the plan. 'You didn’t pick out the model of the house. You didn’t pick out the exact location. Everybody signed papers without reading what they were signing.'"

"The case of a relatively small development in Southwest Florida illustrates the important role that real estate investors played. Like the day traders who drove up Internet stocks in the late 1990s, these investors, aided by cheap mortgages, helped drive a housing boom over the edge."

"'It was a groundswell,' said Jerry Manning, who runs J. J. Manning Auctioneers, which sells homes in the Northeast and in South Florida. 'Everybody thought that they were going to be a real estate mogul.'"

"'You will have a correction, and the correction will make regional homeowners unhappy' as property prices fall, said John Lonski, chief economist at Moody’s Investors Service. 'Regional mortgage bankers will find their livelihoods threatened.'"

"Transeastern Homes, which builds homes in Florida, is in settlement talks with lenders who contend it is in default on debt totaling hundreds of millions of dollars. 'We’re going to see much bigger builders and much bigger lenders facing bankruptcy because so much of the building has been on a speculative basis,' said real estate consultant Jack McCabe."

"Mr. Matera is paying $4,800 a month on four properties near Sarasota that he cannot sell and that do not collect enough in rent to cover their costs. Two properties, which are complete, are under his name and have tenants. His mother-in-law and his sister each own one of the two incomplete homes that cannot be finished because they have liens."

"All together, about 100 of the nearly 500 investors are from the New York area, according to lawyers who are representing many buyers."

"Seashore Resorts in South Carolina steered borrowers toward loans that start out as construction debt and convert into traditional mortgages when the house is built. 'I’ve got my father stuck, my brother stuck, an ex-wife stuck,' said Carl Cirinelli, a partner at Seashore. He says that he recruited 25 relatives and friends and has a $200,000 loan under his name."

"Investors who signed on to buy the homes say the experience has been a painful reminder that real estate can be risky, but they insisted that the rewards can be great, too."

"Alan and Linda Ellman, who live in Plainview, N.Y., put a $12,000 deposit on a $300,000 home in the spring of 2005 after hearing about the offer from Mr. Matera. Given their previous successful experience with investment properties, Mr. Ellman estimated that he would be able to sell the home for a $40,000 profit. 'Nobody twisted our arms,' he said."

"Instead, the home now has liens totaling $17,000 from landscapers, painters, insulation companies and cabinet makers. They still have not seen the house, but a real estate broker there reports that the driveway is unpaved and the swimming pool is an empty shell."

"In spite of the problems, Mr. Matera, for one, believes that real estate is a safer investment than stocks. 'I would rather have a house that I can’t sell at the moment than a stock certificate,' he said. 'I still have a house. It’s not what an owner of Enron stock can say.'"