The Houston Chronicle reports from Texas. "Last year, nearly 400 people who owned more than one home in the Houston area accounted for more than 1,000 foreclosures, an analysis of local data shows. That's up from about 150 investors who were responsible for about 350 foreclosures two years earlier, according to a Houston Chronicle analysis."

"Although it's unclear how big a factor the novice investor is in the current market, it is clear that defaults among multiple homeowners contributed to a 44 percent increase in foreclosures in Harris, Montgomery and Fort Bend counties. Foreclosures shot up to 11,983 in 2006 from 8,300 in 2004."

"'Unsophisticated investors always make mistakes because they speculate instead of buying something that's a good investment,' said Del Walmsley, president of Lifestyles Unlimited. 'They go out and buy anything.'"

"Condos in Houston are generally difficult to rent, noted Walmsley. Here, potential tenants can usually pay the same or less rent to live in an apartment with many amenities or even to rent a house, he said. It's hard, he said, to charge a rent in Houston that's high enough to cover monthly mortgage payments and maintenance dues."

"Another reason condos sometimes end up in foreclosure is because investors try to sell them to individuals when often 'they're really just glorified apartments,' said Rickey Williams, president of Homevestors WFI Properties in Houston. 'They're converted apartments. Would you rather go to an upgraded apartment complex or an older one that's been turned into a condo?'"

"Large homes can also be a problem, Walmsley said. 'Big houses aren't going to rent,' he said. 'If you're an investor and don't know that, you're going to load yourself on houses you can buy well below market. Problem is, they won't rent, so they get upside down.'"

"Some can't keep up with their homeowner association fees. At Candlelight Trails in northwest Houston, for example, the homeowners association foreclosed on 22 of its more than 240 units in 2006, according to the listing service."

"All of those foreclosures resulted from nonpayment of monthly maintenance fees, said Shirley Gonzales, who sits on the association's three-member board. Gonzales said many investors can't afford the average monthly dues of $250 because they can't find steady tenants to live in the community."

"Many first-time investors lost their properties after getting entangled in questionable deals. The problem has become so pervasive in Houston that the FBI has created a special unit here to crack down on mortgage fraud."

"Chris Robison said she recently filed a complaint with the FBI claiming she got lured into buying a house in Pearland and a condo downtown that were doomed investments from the start. 'I signed the loans. I didn't know what I was doing,' she said. 'Now my credit is ruined.'"

"Unfortunately, she didn't read the loan papers thoroughly before she signed them, said Robison, who provided the Chronicle with the documents. Her loan applications, she said, state separate monthly incomes inflated by thousands of dollars and stated she would be living in the two properties."

"'I just trusted these people. I didn't read anything,' she said."

The American Statesman. "Will Austin dodge the subprime bullet? Or will the industry's woes rattle the region's real estate market? Industry experts say builders will put up fewer entry-level homes in Central Texas as the pool of buyers shrinks. There will be some effect on the resale market."

"By the end of 2006, 20 percent of active mortgages in the Bakersfield, Calif., area were subprime, according to San Francisco-based First American LoanPerformance. In Texas, McAllen had the highest rate, 26 percent. The national average is 14.7 percent. In Central Texas, however, the rate was 8.6 percent. Among large Texas cities, only Houston's was above the national average."

"Lenders 'are going to look for a better credit score and more income, and that's going to hurt the housing market,' said Greg Hallman, a lecturer at the University of Texas. 'The degree to which it's going to hurt — that's what we don't know yet.'"

"Whatever the effect, 'we are going to feel that in Austin' Hallman said. 'We are going to feel that all over.'"

"The days of aggressive zero-down financing offers and loan approvals for those with credit scores in the 500 range — a high-risk score — are gone for now. Locally, mortgage brokers and real estate agents alike are starting to see some of the signs."

"Gary Solka, a consultant at Milestone Mortgage, said subprime mortgage holders hoping to refinance are having trouble qualifying for a loan with a lower interest rate. Those homeowners could be in deeper trouble when their adjustable-rate loans reset to a higher figure, meaning a bigger mortgage payment, Solka said."

"Paul Borman, an agent for Avalar at Steiner Ranch, said he has started turning away prospective buyers who would have qualified for a mortgage two months ago. For example, zero move-in financing for buyers with a 620 credit score will be harder to come by, Borman said. Now, those buyers are going to need a down payment."

"'It's going to take buyers out of the market,' he said."

"The Federal Reserve Bank of Dallas is watching the situation, but senior economist Pia Orrenius said the Texas economy is solid. 'We have a healthy housing market in Texas as a whole relative to the nation,' Orrenius said. 'Austin is a little bit of an exception — it had the biggest runup in home prices — but again, the Austin economy is very healthy, with fundamental underlying strengths that are propping up home values, and none of those are expected to change.'"

"In some cases, subprime lenders have stopped doing business as a result of cease and desist orders from regulators. Regulators at the Texas Department of Savings and Mortgage Lending are watching the situation closely, Commissioner Danny Payne said."

"Payne said the subprime troubles could be the beginning of the end for risky loan products and exotic financing."

The Times Record News. "North Texans could have a tougher time getting mortgage loans in the future as a result of the subprime mortgage worries that are trickling through financial markets."

"Ralph Dunkelberg III, vice president and mortgage specialist at Fidelity Bank in Wichita Falls, said the subprime fallout will affect borrowers with good credit as well as those considered poor risks. 'Unfortunately, the subprime problem is segueing over into the mainline loan industry,' Dunkelberg said."

"Dunkelberg said the lending institutions from which he acquires money for local mortgages have raised credit score requirements on borrowers by 10 to 20 points."

"Between 2004 and 2006, subprime loans accounted for about 11 percent of the mortgages issued in Wichita Falls, according to First American Loan Performance. The number of those borrowers who were 60 days or more past due on payments was about 12 percent during the same period."

"Dunkelberg said one reason lenders made so many subprime loans is because a growing number of Americans can't qualify for better mortgages 'Unfortunately, we're seeing more and more declining credit scores over the past few years,' he said, mainly among people under age 30. 'Many folks have great income, but their credit is bad and they owe as much as much as they make.'"

"Gail Cunningham of Consumer Credit Counseling Service said her agency has seen the impact of risky-credit families buying homes. 'They get into buying a house with their heart, not their head,'" she said."

"'Lenders want to keep you in your house and keep you paying,' Cunningham said. She said that's especially true in a softening housing market where lenders don't want to risk taking possession of houses that might sit on the market a long time and then sell at a loss."