The Morning Call reports from Pennsylvania. "Charline Pillinger and boyfriend Christopher Dorsey wanted more space for themselves and their five children, so they moved out of a $500-a-month two-bedroom apartmen. The couple had no savings and earned only $40,000 combined, but they still qualified for a mortgage to buy the $124,000 home in May 2005. The investment, they now know, was a disaster."

"Pillinger and Dorsey...say they never saw it coming when they were buying their homes. 'I was very confused,' Pillinger said."

"Neither made more than $20,000 per year, nor did they have much money saved. With a bankruptcy in his past, Dorsey's credit rating was so poor he couldn't be on the mortgage application, so it included his income but was in Pillinger's name only, according to the documents provided to The Morning Call by the couple."

"Less than a decade ago, a lender would have told them to stay in the apartment, save money and rebuild Dorsey's credit."

"Pillinger said she did not understand the paperwork, and that her financial ignorance and excitement over buying a house led her to sign her name to an adjustable rate on a $99,200 first mortgage. It had a manageable $603-a-month beginning payment, but an interest rate that could swing from an opening rate of 6.125 percent to a crushing 11.125 percent."

"She also took out a second loan for $24,800 to cover the down payment. That loan, costing them another $217 a month, is due in 15 years and packed a second punch: a balloon payment of more than $20,000 at the end."

"'I didn't know nothing about a balloon payment,' Dorsey said."

The Washington Post. "More than 700 homes were in foreclosure in Montgomery County between April and June of this year, up from 49 during the same period last year, said Maryland Labor Secretary Tom Perez, offering a sobering picture yesterday of how the surge in foreclosures is affecting the affluent county."

"Prince George's County continues to have the highest percentage of homes in foreclosure in Maryland. More than 2,300 foreclosures have been recorded in the county this year."

"In Montgomery, there were more foreclosures in the first quarter of this year than in all of 2006."

"'Sometimes there's a perception that a place like Montgomery County is immune to something like this,' County Executive Isiah Leggett said."

The Baltimore Sun from Maryland. "Borrowers who stretched to qualify for more flexible loans have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts say."

"'You're seeing nicer homes, higher-priced homes,' agreed Jeff Rogers, an associate broker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. 'You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages.'"

"Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006. Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu of Baltimore."

"'Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity,' Basu said. 'I don't think we've begun to see that impact in a major way.'"

"Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer."

"Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas."

"'With more inventory, it's a buyer's market now,' Marshall said. 'People aren't going to offer what the house is listed for.'"

"Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity, or even negative equity, has grown, particularly in cases of pricier homes with more recent mortgages."

"'Because we're seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties,' or buyers other than the lender,' said Donald Miller, national sales director for Express Auctions, of Baltimore."

"Miller said about 30 percent of the homes sold through his company's foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general."

"One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said."

"The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000."

"Evelyn Ray, a real estate agent in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients."

"'Now, people just cannot afford the houses that are out there,' said Ray. 'I have about 30 buyers who are just waiting. They either can't afford the houses they want or are just scared or waiting for prices to come down, or they can't sell.'"

The Daily Reflector from North Carolina. "Second homes accounted for 36 percent of all residential property sold in the United States last year, according to the National Association of Realtors, and the abundance of rivers and beaches make eastern North Carolina a prime destination for recreation-loving baby boomers."

"Real estate agent Serena Sullivan said speculation buying contributed to driving up housing costs, with investors looking to cash in on quickly escalating prices. Atlantic Beach also is undergoing a transformation with condominium complexes replacing old hotels and mobile home parks."

"'There's a lot of inventory at the beach right now,' Sullivan said. 'There's a great selection for people.'"

"Maria Wilson, VP of Coldwell Banker Coastal Realty in Washington, said the housing market nationwide is undergoing a correction after the bubble burst last year. A stagnant market in other areas of the country has a trickle-down effect, she said."

"'The market in other areas has affected us somewhat, but we still have a brisk second home market,' Wilson said. 'We still have people who are selling their properties in other places and coming down and buying. It just isn't as immediate as it was. I can't say that we're not affected by that, but we aren't as affected as some other areas are.'"

"David Harrell and his wife recently got a taste of the shock value when pricing condos in Atlantic Beach. They...wanted a vacation retreat more convenient to their Greenville home."

"'I love Myrtle Beach because there is so much to do there, but it is a long ride,' said David Harrell. 'Real estate is really high. When you look at what people bought these places for back in 2002 and 2003, it's at least double for them (now). It kind of bothers me. It's ridiculous. That's been my holdup. It's so expensive.'"