The Miami Herald reports from Florida. "In a blow to an already weak housing market, Option One Mortgage will no longer provide mortgages to buy Florida condos, a decision industry watchers warn other lenders could copy. Option One's move comes as the once-hot market for condominiums in Florida has become glutted with thousands of unsold units."

"Warned Alex Barron, an analyst with Agency Trading Group: 'It's got a pretty broad implication.' If other lenders follow, 'you're going to find a lot of very desperate buyers' who won't be able to close even if they wanted to.'"

"The news comes at a dark time for the Sunshine State, which has found itself in a condo glut. In Miami-Dade County, there's a 31-month supply of existing condos, and the pace of sales has dropped nearly 40 percent year over year, according to McCabe Research & Consulting in Deerfield Beach."

"'I think the worst thing you want to do in this market is be a condo seller,' said Jim Gillis, broker in Miami. 'It's almost like a disease that is going to be very difficult to get rid of.'"

"Something is missing from two new companion condo towers in the inner core of Miami's downtown: cars. The white towers of the Loft 1 and Loft 2 buildings have no garages."

"Forgoing on-site parking means huge savings in land and construction costs for developers, and affordable, well-finished if compact urban dwellings for buyers."

"If all five buildings are completed, downtown would have about 1,600 new workforce condos, according to the parking authority. Prices at Loft 1's 196 units, now open and occupied, ranged from $99,000 to $250,000. At Loft 4, a planned 404-unit tower, sales opened this week, with prices at $139,000 to $399,000."

"'Urban housing should not have parking on site, especially workforce housing,' said Miami real estate analyst Michael Cannon. 'People in Miami have to be educated that that's the way it should be.'"

From CNBC. "Mike Huckman reports that the tip of the Florida peninsula is being called the 'ground zero' of the market downturn."

"He says that in Florida's three toniest counties, prices have plunged 7%-9% over the past year, thanks to ballooning inventory. Some 45,000 new condos are currently being built, on top of 63,000 condo conversions over the past few years."

"One site Huckman visited, a $91 million, 522-unit condo conversion project, is now in receivership."

The Orlando Sentinel. "I'm living next to the Amazon jungle, you see. My neighbor's once-pristine property has gone to seed, another casualty in America's stagnant housing market. For months, the 'For Sale' sign in the weedy front yard was the punch line of a cruel shopworn joke."

"Gone from our communities are scores of families that overreached pursuing the American dream. Left behind are thousands of homeowners who inherited the nightmare of declining property values and shabby vacant homes that are selling as fast as Slurpees in the Arctic in a market with a 20-month glut of homes."

"Code-enforcement units report spikes in complaints about overgrown yards, pools with foul green water and junky driveways. 'You'd be surprised at the number of overgrown lots at [upscale Orlando communities] Vista East and MetroWest,' says Mike Rhodes, code-enforcement manager for Orlando."

"Don't bother calling the real-estate agent on the 'For Sale' sign. All he or she can do is plead with the property owner to act responsibly. William Weaver, a real-estate professor at the University of Central Florida, says lenders have a legal duty, a fiduciary responsibility to the foreclosed, and an ethical responsibility to keep the property from becoming an 'eyesore.' In reality, though, you often have to 'rattle the chain to get them to cut the grass.'"

"Overgrown properties, he says, 'obviously are going to be a concern now and will continue to be a concern. It's not going away, and it's going to get worse.'"

"'Too many people have been funded who really shouldn't have gotten loans, and as a result it's affected all of us,' says Gary Balanoff, VP of the Orlando Regional Realtor Association."

'"We're now trying to bail out of a leaky-boat situation.'"

The Herald Tribune. "Think the global credit crunch is something distant? Not if your loan was in the pipeline from First Magnus, which made $30 billion in mortgages last year and employs 5,000 people, all of whom were sent home from work, apparently for good, on Thursday."

"The First Magnus episode is becoming all too common, and that phenomenon is making itself felt in Southwest Florida, where real estate is the king of the hill."

"'A lot of lenders I used to work with are going out of business,' said Marta Grande, a Sarasota mortgage broker who had counted on First Magnus for quite a few loans up until this week. 'I would have to say about 40 percent.'"

"'All of us in the food chain, bankers, builders developers, mortgage lenders, I would say we all got a little bit intoxicated with the market,' said Jody Hudgins, Florida executive for the First National Bank of Pennsylvania, which operates in Sarasota and five other Florida communities."

"'As far as getting a loan, it is a real, real struggle to get somebody with good credit a loan,' Grande said."

"Even very prosperous investors like Sarasota's Harvey Vengroff, founder of the world's largest debt collection agency, are running into extreme makeovers on their real estate loan paperwork."

"'One is for $5.7 million on a property that was a no-brainer a couple of months ago,' groused Vengroff. 'Now they're asking for more information and checking their verbiage and doing other stupid stuff.'"

"The media has put nearly all its attention on defaults for so-called subprime mortgages. However, less exotic creations like 'no-documentation loans' for those with high credit ratings and big bank accounts, and even normal real estate loans for investors, are becoming rarer."

"'It all kind of went down with the subprime, but that's all everybody hears about,' said Max Shaw, a residential lending officer at People's Community Bank in Sarasota."

"Like Grande, he said that so-called 'Alt-A' loans have nearly vanished. 'It is just getting back to the way it should be,' Shaw maintains. 'It is just that you are going to have to have decent credit and you are going to have to prove you have what you say you have.'"

"The nation is still about 18 months away from feeling the full impact of those loans, because they reached their peak popularity about two years ago, said Sarasota's Bob DeCecco, the former head of Opteum Financial Services' Florida operations."

"'So these individuals got 100 percent loan-to-value loans, on properties that are now depreciating, with interest rates increasing, and a tighter credit market, in which they would not even re-qualify for that program,' DeCecco said. 'They have to refinance, and they can't.'"

"Shaw said he has plenty of money to lend, for those planning to move into the home. OK, but what about an investor seeking to buy and then rent out a bargain home being made available by a desperate seller?"

"'I couldn't even quote you investor money,' Shaw said."

"The collateral damage from cheap money turning expensive is definitely not limited to consumers. The run-up in volume and prices on expensive homes during the first half of the decade caused developers and builders to bolt herd-like to grab property for future construction."

"In nearly every case, there was a banker at the front end making a construction loan with an interest payment reserve to tide the developer over while he or she prepared the property for eventual sale."

"With those projects now getting postponed in Southwest Florida's slow housing market, those interest payment 'set-asides,' in some cases, are now running out, said Hudgins."

"A lot of those real estate speculators and developers will not have the money to carry the debt. Banks will then be faced with 'limited options,' one of which is foreclosure, he said."

"'Nearly every banker in Florida got seduced,' Hudgins said. 'What we never put into the equation was how much of the purchasing was fueled by easy money, cheap money, foolish money, from lending sources that were desperate to meet their production needs.'"