The Register Star reports from Illinois. "When Kim Thusing put her home up for sale in August, she was confident about her chances. 'When I put it on the market, honestly I thought it would sell in a week,' said Thusing. 'We’ve had lots of people looking and lots of complimentary remarks, but they seem to be weighing their options.'"

"After three years of rapidly escalating prices, the average sale price of homes went from nearly $122,000 to $141,000, the boom went bust in the last half of 2006."

"The Rockford Area Association of Realtors tracks home and condominium sales in 114 'grids' or areas in Boone, Ogle and Winnebago counties. In 2006, the average sale price fell in 27 of the grids."

"'There wasn’t anything that really changed when the (local) market came to a standstill. It wasn’t like a huge factory closed,' Thusing said. 'People read what was in the news and started looking for prices to drop.'"

The Chicago Tribune from Illinois. "The national subprime lending calamity first reached the South Side graystone on Greenwood Avenue in November. That was when the homeowner, Georgia Rhone, first missed payment on a mortgage that jumped from $974 a month in 2004 to $1,850 a month last year."

"Her lender now has begun foreclosure procedures as a result of a deal she realizes she never quite understood but has her in a vise: a mortgage charging 11.625 percent after being refinanced twice in two years."

"In Illinois, the percentage of subprime loans in foreclosure at the end of 2006 was 6.22 percent, up from 5.04 percent a year ago, according to the Mortgage Bankers Association."

"'Lenders are so scared about losing market share,' said Malcolm Bush, president of a Chicago non-profit that studies housing. Their subprime underwriting has become so 'appalling,' he said, that some borrowers are defaulting on adjustable-rate mortgages even before the rates change for the first time."

"In Chicago, more than 56,000 high-cost mortgages were originated in 2005, double the number in 2004. Adds Jeff Metcalf, who tracks foreclosures: 'We see instances where people aren't even in their homes for a year.'"

"Rhone said she told her broker the monthly payment on the most recent deal he brought her was 'very, very steep for my budget.' 'They said, 'This is the best deal' available and that we would refinance in a few months,' she said."

"'We are seeing it across the board' in all price ranges and in all types of communities, said (broker) Jim Rossi. 'A lot of lenders who came into business in the last five years applied the wrong product to the wrong buyers,' Rossi said. Buyers were 'stretched into larger monthly payments than they should have had.'"

"Lending practices 'were so loose that it drove prices up,' he said. That, in turn, created a 'snowball effect.' As prices rose, buyers needed larger mortgages to buy the house, and lenders eased standards to do the deals."

The Kansas City Star from Missouri. "Negotiating a home purchase is a bit like playing poker. This spring, with about 18,000 houses on the Kansas City market, the cards favor buyers."

"About 30 percent of the homes on the market are new, the hangover from the recent building boom when builders were cranking out 10,000 or more houses annually."

"According to the latest data from the Realtors association, the area’s housing inventory stood at 18,133 homes in January. Put another way, there was a 15.9-month supply of new home inventory at the sales pace in January, and an 8.6-months existing home supply."

"New homes are particularly plentiful in the Northland and Wyandotte County, and the price range where some serious 'wheeling and dealing' should be occurring is the mid to upper six-figure range, said agent Steve Johnston."

"'Metrowide, upscale is a buyers’ market,' he said. 'The real upper reaches like $1 million plus, it’s not so bad because sellers can hold out. With the $400,000 to $800,000 homes, a lot is available and that’s where the wheeling and dealing comes in.'"

"'Buyers can find the area they want and if the seller is not willing to take your price, you have the luxury of moving to the next one,' said Jim Nutter Jr. of James B. Nutter & Co., a locally based national lender. 'Two years ago, you didn’t have that luxury. You had to move fast or it was gone.'"

"Matt Buff benefited mightily from that third-party sale scenario recently. He and his family shaved 20 percent off the cost of a house in Olathe that had been appraised for $185,000. They not only paid $147,000 for their new home, but received a $14,000 check from the seller to cover minor repairs and some cosmetic improvements."

"'It was a corporation that had bought the home from someone who had to move on,' Buff said."

From St Louis Today in Missouri. "The American dream of home ownership could prove even more elusive as lenders clamp down in the wake of a rising foreclosure rate for the riskiest loans, say bankers, economists and community activists."

"Don Menendez, a senior loan officer in Creve Coeur, said he already is seeing some sources of subprime lending dry up. Other funding sources are raising the credit rating needed to get a loan."

"'Every day, I'm getting e-mail saying that this program now requires a certain credit score or the programs have been deleted,' Menendez said."

"'If someone comes in with not-so-good credit, our options are being limited every day,' he said. 'In the near future, I believe this credit is going to become obsolete.'"

"Rick Sharp, a former president of the Mortgage Bankers Association of St. Louis, and Marve Stockert, executive director of the Illinois Association of Mortgage Brokers, said they're alarmed at the amount of mortgage fraud in the two states, which they say contributes to the problem, and in some cases results from subprime loans."

"In Illinois, banking regulators have just one investigator to document fraud at the state's 2,000 mortgage companies, and the person in that job recently quit, Stockert said."

"Bob Cropf, an associate professor com crash of a few years ago. 'It was a fairly big money maker until recently,' Cropf said of the subprime loan market. 'The perception was that these types of loans were stronger than they were,' Cropf said. Investors 'certainly weren't being careful. They were putting too much capital in this area.'"

The Star Tribune from Minnesota. "With time ticking on his adjustable rate mortgage, Mark Lamb has been trying to refinance to a fixed rate and save himself from a $400 monthly payment increase come July."

"The response from lenders is always the same: Pay down your debt and improve your credit score, both of which have been the same since he got the mortgage two years ago. Refinancing is 'a lot more difficult now,' Lamb said. 'It was fairly easy to do that two years ago.'"

"The source of the trouble is the same part of the mortgage industry that helped drive the biggest housing boom in history over the past five years. Until recently, lenders worked to outdo each other at finding new ways to relax their standards and create increasingly exotic mortgages."

"'Anyone with a pulse and who could fog a mirror could get a mortgage, but we're seeing that that just isn't the case anymore,' said Ronny Loew, a mortgage banker in Edina."

"He said underwriting guidelines seem to change daily. He recently got notice that the minimum credit score for an Alt-A program for borrowers with marginal to good credit is going up from 620 to 660."

"In some cases, he said, buyers are having to shop for less expensive houses to meet the new guidelines. For example, a person who might have qualified to buy a $220,000 house two months ago might now only qualify for a $205,000 house."

"Doug Winter, senior VP for Countrywide Home Loans in Plymouth, agreed that the availability of subprime and Alt-A mortgages has changed dramatically. But he's also seeing stricter requirements for second mortgages and home-equity loans."

"He used to be able to offer a first mortgage for 80 percent of the property's value combined with a second mortgage for the remaining 20 percent to people with credit scores in the mid-600s or lower. 'Today, you can't find a buyer to take that second mortgage.'"