The News Press reports from Florida. "A Michigan credit union has collapsed following hundreds of questionable loans to people buying First Home Builder houses in Lee County. Meanwhile, some buyers have filed suit against First Home, the credit union and others, alleging fraud and conspiracy in the marketing, sale and financing of the homes."

"The credit union also made loans for building houses that may not be worth the full amount of the loan after the housing market collapsed last year, say those involved. Fort Myers-based attorney Richard Ingalls said he has five clients with contracts to buy First Home houses that are worth far less than the amounts of the construction loans."

"Often they have no way to close on their houses because they can’t get permanent financing for the full loan and can’t make up the difference, he said. 'These are people who initially got into these investments with good credit scores but not many assets,' Ingalls said."

"Larry Sorsby, CFO of Hovnanian Enterprises, parent company of First Home, said 'up until two or three weeks ago we had no idea Huron even existed. We had no direct dealings with Huron; we were dealing with a local mortgage company that I guess made the loans and may have assigned them' to Huron."

"Sorsby said he doesn’t think any fraud occurred. 'What we’re faced with is a classic situation where a market in Southwest Florida experienced an intense boom' and then collapsed, leaving prices lower than what some had agreed to pay, he said."

"Lawyer Steve Carta said there was no fraud and the lawsuits concerned a program in which First Home provided tenants for the homes that it sold. 'That program did exist and was very successful until the market tumbled,' he said."

"Michael Timmerman, the Naples-based managing director for Florida at Hanley Wood, said that if a substantial number of the mainly moderately priced homes involved go into foreclosure, prices likely would come down for that sector of the housing market."

"Timmerman said there will be a lot of shaky home loans at all levels of the market. 'I think we’re going to see more distressed sales in 2007,' he said."

The Miami Herald. "The owners of Holiday Isle announced Monday they were scrapping plans to finance a new luxury resort there with condominium sales and will seek a traditional commercial loan to build the project instead."

"The decision reflects South Florida's growing disillusionment with condo-hotels, where individuals own the rooms and share in the rental revenues."

"Robert Falor, once South Florida's most prolific condo-hotel converter, said he has dropped plans to convert South Beach's Royal Palm, Breakwater and Edison hotels in the face of a slow real estate market that helped push the Breakwater and Edison projects into bankruptcy."

"'The market for the condo-hotel has just gone sideways,' said Gregory Rumpel, executive VP of the Jones Lang LaSalle hotel brokerage in Coral Gables."

"With the housing market slow, sales of Miami-Dade condominiums dropped 44 percent in February from a year ago...Rumpel said hotels are looking more lucrative than condominiums for some real estate developers."

"Adam Schlesinger, whose company paid $98 million for the 151-room Holiday Isle in February, said weak sales forced him to switch gears after only two months, despite a lavish launch that included glossy full-page newspaper supplements for the planned Ocanos resort."

"'It is simply a victim of a skeptical housing market,' Schlesinger said."

From USA Today. "The housing market in Sarasota, Fla. hit the brakes in spring of last year. The median price for a single-family home was down 18% in the fourth quarter compared with the same quarter of 2005."

"At the height of the boom, 'People were buying sight unseen,' says Russ Marquardt, an agent in Sarasota. 'It's not similar to that now by any means.'"

The Naples Insider. "At the end of March, Naples had a slightly less than 12,000 homes listed for sale. Which is three times higher than a balanced market. But, during March the number of homes listed for sale peaked at over 12,300 homes. The reduction down to 12,000 homes is the first noticeable decrease in the number of homes listed for sale, since late 2005."

"The reduction is not due to increased buying activity, but rather by sellers taking homes off the market at a greater rate than those being added."

"Of the 12,000 homes listed for sale, approximately 35% were purchased in 2005 or later, pretty much making the original purchase price for that group of homes higher than current market values."

"Those high price sellers waiting for the return of peak prices might have a very long wait. Using the Cedar Hammock example, where a 1,232 sq. ft floor plan sold at peak prices at $425,000 and then later sold for $280,000 in 2007. If a $280,000 purchase increased in value 8% a year going forward, it would take over 5 years to return to peak price levels."

The Tampa Tribune. "A sluggish real estate market and a glut of vacant land in some areas have KB Home, one of the nation's largest home builders, trying to unload land in three Bay area counties."

"Los Angeles-based KB isn't the only builder finding that it overestimated demand for new homes in some markets. Blake Whitney Thompson said he is in talks with several other major builders that want to shed land. This could mean less expensive homes and property for consumers and developers who have been used to dealing with high prices in recent years."

"'It's a very poor market in Florida right now,' said analyst Greg Gieber. He covers KB and other home-building companies. 'Builders have too much land and aren't in the position to hold on to it for very long.'"

"Now that market conditions have changed, some of the planned subdivisions no longer are profitable, said Joseph Narkiewicz, president of the Tampa Bay Builder's Association."

"'Builders are evaluating their holdings; some are trading sites, selling some and buying others,' Narkiewicz said. 'Some may want to shake loose lots, because you can only hold on to so many lots and build so many houses.'"

"The Cypress deal is expected to close June 1. The purchase price for the land was not disclosed, but Thompson said his company generally is offering about $14,000 to $17,000 per home lot. By comparison, the same types of lots typically went for $50,000 to $60,000 last year, Thompson said."

"The KB contract doesn't surprise some analysts, such as Paul Puryear of Raymond James & Associates in St. Petersburg. 'All the home builders are trying to sell off excess land, without exception,' Puryear said. 'This is good for consumers who are trying to buy.'"