The Rocky Mountain News reports from Colorado. "Debra Dotson discovered the hard truth Tuesday, that the house she has lived in for 10 years was no longer hers. She joined thousands of others who have seen their adjustable mortgage rates climb, their monthly house payments climb and their hopes of holding onto their houses plummet into foreclosure."

"Dotson...grabbed what looked like a great refinance opportunity in 2004, then lost her job in November 2005 and is scraping by in 2007. Dotson's home, which she bought for $117,000 in 1997, was auctioned to World Savings Bank for $159,333. She has to be out of the house in July. 'I don't know where to go,' she said. 'I feel lost.'"

"Now (it's) in the hands of the bank that had sold her the adjustable- rate mortgage in 2004 after she converted it from a 30-year loan with a rate fixed at 7.5 percent. It was a mistake, she said."

"'I hesitated, but I did it,' Dotson said, adding that she never sought out the ARM but instead was offered it through the bank."

"Last year, Denver had more than 5,100 foreclosures, and 2007 was off to a blistering pace when, through February, 1,057 foreclosure notices had been given. Statewide, Colorado was hit by 9,254 foreclosure filings in the first quarter of 2007, putting the state on track to top last year's record foreclosures by about 25 percent."

"Last year, 28,453 foreclosures were filed statewide. This year, that number could rise to about 36,000."

From KOAA TV in Colorado. "News First has learned that complaints are being filed with state regulators against several people involved in a mortgage deal that's left a young family in a bad situation."

"Not only are they facing foreclosure, but it appears the Colorado Springs home they paid $284,000 for is crumbling beneath them."

"It's the first home for Tim Archer and his wife Alicia. They admit they had no idea what they were getting into when they bought the home last year. 'Very, very bad. I'd rather rent again. As of right now, I'd rather rent again,' Tim Archer said."

"We know the home sold on April 21, 2005 for $200,000. It then appraised on September 15, 2006 for $284,000."

"The loan application that shows Archer makes $7,500 a month. Archer says he told the mortgage broker he averages around $4,000 a month, and the $7,500 amount is only a high end that he makes a couple of months a year."

"'It was our first house. We were excited we were getting approved for a house, no more renting,' Archer said. So he signed all the papers he was given. But now, his house payments are up to $2,500 a month and rising. 'We don't want to lose our home, but we might not have a choice,' Archer said."

"Another broker told the Archer family they're upside down in the loan and can't refinance out."

"We tried to track down everyone involved. Several said there's much more to the story and that the home buyers are at fault. They told us the Archer family wanted to get into a house fast and were warned about all the pitfalls. But no one would agree to an on camera interview."

The Arizona Republic. "Having trouble selling your house so you can buy that new dream home? No worries. Some builders will let you trade in the old place as part of the deal for a new one."

"The new programs are driven by a drop in new-home orders and soaring cancellation rates that have left many builders with an excess of unsold homes. Cancellations shot from 1 percent in January 2005, the midst of the housing boom, to nearly 29 percent in March, according to Hanley Wood Market Intelligence."

"Although some companies are seeing an improvement over last year, cancellations were still running high the first quarter of 2007. At Scottsdale-based Meritage Homes, cancellations stood at 28 percent. At KB Home, it was 31 percent. Pulte Homes lost 25 percent of the sales to cancellations in its Southwest division, which includes Arizona."

"'The resale market is slow right now,' said Dan Tartabini, sales director at KB Home. 'We want to make sure people who buy from us that have a house to sell get to the finish line.'"

"Upper-end builder T.W. Lewis of Tempe, buys select resale houses from buyers of its built but unsold homes. The resale must appraise below $500,000. The company will consider paying 90 percent of that price."

"Alfredo and Raquel Matute wanted to buy a new house in the north Valley but were concerned about getting a decent price. They knew resale prices were falling, and they didn't want to 'give the house away,' Alfredo said."

"Yet they also wanted a new, bigger house so they could start a family. They thought the time was right since builders were overloaded with unsold houses and were offering big inducements to buy."

"The couple decided to buy in a Maracay Homes project in north Phoenix. They signed up for a referral program that set them up with an agent who priced their house at $409,000 in a neighborhood where similar homes were listing for $420,000 to $435,000."

"The house sold in three weeks for $400,000. The couple originally paid $220,000 for the house 3 1/2 years ago, so they could afford to be flexible on the price. 'We were kind of aggressive,' Alfredo said. 'We knew we were taking a high risk, but I told my wife: 'This is the best time to sell this house. The (resale) prices are going down.'"

"Some analysts see these programs as a sign that builders are in trouble and doing anything it takes to lock in sales. 'These trade-ins signal the real trouble some Phoenix builders are experiencing now,' said Jim Belfiore of Phoenix-based Belfiore Real Estate Consulting 'We thought in December home-building was starting to make a real turnaround. But this move signals real desperation by some.'"

"John Burns, a California-based analyst said he has noticed another sales tactic recently: Builders putting mortgage experts into their sales offices. That means builders are trying to eliminate cancellations before they happen."

"'They don't even want to go into contract with people who can't close,' Burns said."

The Arizona Daily Star. "Home builders are deeply lowering prices to sell houses quickly, according to market research from Bright Future Business Consultants. The median new home sold for $241,020 in April, down 9.5 percent from $266,265 a year ago, 'the largest decrease in any price on a monthly basis in recent history,' said analyst John Strobeck."

"'But it's a good decrease,' he added. 'That's reflecting the current market much better and it'll help move the product that's out there.'"

"Prices likely will continue to decrease because they are inflated, Strobeck said. There are around 10,000 homes in the resale market now, about twice the normal number, he added."