The York Dispatch reports from Pennsylvania. "The number of foreclosure notices in York County for the first quarter of 2007 increased 54 percent over the same period last year. If those notices amount to actual foreclosures, it could have an 'ugly effect on the overall community,' said Leigh Smith, executive director for the Housing Alliance of York."

"Foreclosure notices increased from 216 in the first three months of 2006 to 334 in the first quarter of this year."

"'The problem might be in the financial institutions being too lax in extending credit to homebuyers,' said Jacob DeRooy, an economist at Penn State Harrisburg."

"Homeowners across the nation have been defaulting on loans in the subprime market and loans offered to people with less documentation, such as verification of income. 'We're perhaps reaping the effects of a too liberal financial environment,' DeRooy said."

The Patriot News from Pennsylvania. "Like elsewhere in the country, Dauphin County is seeing an increase in the number of houses and other properties falling into foreclosure. Cumberland County saw a large jump, from 350 to 543, while Lebanon, Perry and York counties also experienced increases."

"The cases called at the sale last week varied. Many of the properties were in Harrisburg, where the amount owed ranged between $30,000 and $60,000. Some appeared to have been investments, where a single owner had multiple listings that were in default."

"But several of the properties were in the suburbs, and it appeared their owners had just gotten in over their heads. For example, two houses in Derry and Susquehanna townships sold at the auction. The amount owed to banks was more than $200,000 each."

"The interest rates on such mortgages taken out at the height of the housing boom are adjusting upward, said economist Ryan Sweet. 'More often than not, it's going to be the straw that broke the camel's back, and you're going to see delinquencies,' Sweet said."

"This month's sheriff's sale was packed with lawyers representing the banks. About 65 of the 170 properties posted for sale that day sold. The lawyers did most of the successful bidding."

The Virginia Pilot. "When Joseph Rinaldi lost his job last May, he and his wife began tapping their personal savings for the monthly mortgage payments of $1,800. After finding full-time work late last year, he tried repeatedly to devise a repayment plan and filled out the required forms."

"The lender, however, delayed acting and made additional demands, he said. In late February, a friend told Rinaldi that his house 'was in the newspaper.'"

"A growing number of Hampton Roads homeowners are finding themselves in Rinaldi's situation. During January and February, 181 of the region's homeowners were in some stage of foreclosure, almost double the 100 for the comparable two months in 2006, according to RealtyTrac."

"That jump came on top of increases of 45 percent or more for foreclosures in Virginia Beach, Norfolk and Chesapeake last year."

"The surge in seriously delinquent home loans shows no sign of subsiding. Norfolk housing counselor John Allen said that during the first quarter of this year he began working with 15 clients who sought to avoid foreclosure. That was more than all of his clients seeking similar help last year."

"In recent months, dozens of subprime lenders, including a handful that did business in Hampton Roads, have shut down or scaled back their operations because of mounting losses. One that did significant business in Hampton Roads, New Century Financial of Irvine, Calif., sought protection from its creditors in bankruptcy court earlier this month."

"'I've seen a lot of peaks and valleys in the mortgage business, and I was very surprised to see so many people close their doors so quickly,' said Keith Robinson, VP at TowneBank Mortgage in Virginia Beach."

"'People became a little bit complacent with the seemingly low risk,' said said Russell E. Lundeberg Jr., chief investment officer at an asset-management firm in Midlothian. 'The wake-up call came from the subprime lenders that decided to close up shop.'"

The Washington Post. "Even though builders have cut back on the number of new homes they're starting, they are finding themselves saddled with an unusually large inventory of finished or nearly finished homes. Those empty houses are expensive for builders to carry, thanks to construction loans that won't be paid off until the home is sold. So builders are getting serious about unloading them."

"There are 40,409 new, single-family houses on the market in the Maryland and Virginia suburbs, according to Hanley Wood Market Intelligence. That doesn't include condominiums, which are certainly in flush supply, or even townhouses. And nearly one-third of that unsold inventory sits in just two jurisdictions, Prince George's and Loudoun counties."

"'Builders and developers have more inventory than they've had in recent memory, at least in a decade,' said Charles Browning, publisher of New Homes Guide."

"Even if the place you would like to sell is a three-bedroom Cape Cod near the Metro in Bethesda or a 1960s ranch house in North Springfield, potential buyers could be lured away by an irresistible deal on a spanking new house in Prince George's or Loudoun counties."

"And if you're trying to sell a two-year-old house in one of the same developments where these builders are trying to unload their inventory, good luck. The only way to compete with that new-home freshness is to lower your price."

"So what are builders doing to sell their expensive inventory? Some are cutting base prices, some are throwing in free upgrades, and most are advertising their 'quick delivery' homes aggressively. And that is where the deals are."

"Many of these ready-to-own houses represent casualties of the subprime mortgage mess. Local real estate agents say they have been seeing loans, many of them arranged by brokers, fall through after lenders backed out, or went out of business entirely."

"'Houses that were under contract and for whatever reason have washed out, typically builders are a little more aggressive with them,' says Boyd J. Campbell, a broker in Lanham."

"Some builders, instead of throwing in freebies are lowering their base prices, according to Pamela Jones, an associate broker in Loudoun County. 'Some are really lowering the base price and getting people emotionally involved. Then they upsell all the bells and whistles,' said Jones."

"Some have lowered their base prices for single-family houses to less than $600,000, she said. 'They're competing, and they're winning over some of the resales.'"