A report from the New York Times. "When an investment banker set out to buy a $1.5 million home on Long Island last month, his mortgage broker quoted an interest rate of 8 percent. Three days later, when the buyer said he would take the loan, the mortgage banker had bad news: the new rate was 13 percent. 'I have been in the business 20 years and I have never seen' such a big swing in interest rates, said the broker, Bob Moulton, president of the Americana Mortgage Group in Manhasset, N.Y."

"The investment banker’s problem was that he was taking out a so-called jumbo mortgage — a loan greater than the $417,000 mortgage that can be sold to the federally chartered enterprises, Freddie Mac and Fannie Mae. The market for large mortgages has suddenly dried up."

From Newsday in New York. "Local housing prices turned in a mixed performance in June, but they continue to point to an ever-weakening market. Mona Holzman, the branch manager of June Shapiro Realty Laffey Associates in Great Neck, said that the number of closings by the office are down 13 percent from with a year ago."

"She added that because of rising inventories, sellers should be more realistic about pricing their homes. 'We could sell a house in a day if it's priced right,' she said."

"Nesconset economist Thomas Conoscenti attributed the year-to-year declines in Queens primarily to a maxed out market in the borough and a hotter real-estate market in Brooklyn."

"Residential inventory, a key indicator of the market's vitality, rose to 15,185 homes in Suffolk, compared with 13,724, a year ago. In Nassau the number of houses for sale rose to 10,574, from 9,934 a year ago. In Queens, the supply on the market rose to 10,851, compared with 9,483 a year ago."

"When Luveria Hazelwood refinanced her home with now-defunct American Home Mortgage in January, she was told her monthly mortgage payment would drop from more than $3,000 to just over $1,800."

"But Hazelwood said she did not receive the fixed-rate mortgage she thought she was getting, but an adjustable rate one. She now is having to accept financial assistance from her six grown children to pay the $2,204 bill."

"Hazelwood was one of four Long Island residents who testified Tuesday at an Elmont hearing on alleged predatory lending practices and the wave of foreclosures sweeping Long Island and the rest of New York."

"'AHM entered into this relationship without considering whether those borrowing have the ability to pay,' said state Sen. Craig M. Johnson of Havelwood's situation. 'Here you have lenders not recognizing that these loans may not be good for the customers.'"

"According to a survey released by Sen. Jeff Klein in May, Long Island has the highest rate of subprime loan foreclosures in the state, with 22 percent of subprime mortgages issued in 2005 expected to end in foreclosure. 'This is a statewide and nationwide crisis,' Klein said."

The New York Sun. "The Manhattan apartment market, long immune to national trends, could be cooled by the latest credit crunch and its effect on global markets, experts say."

"With hedge funds collapsing and a stock market increasingly prone to wild swings, Wall Street bonuses, a major driver of the booming local housing market, could take a hit, especially when compared with the record awards at the end of 2006."

"Taken with a hike in mortgage rates from wary lenders and a tightening of lending standards, the seemingly endless demand for Manhattan apartments could drop. 'I've been doing this 20 years; I've never seen anything change this fast,' a vice chairman for the brokerage firm Prudential Douglas Elliman who works with the high-end residential market, Dolly Lenz, said."

"'The high-end market is one of confidence; it's pure, pure confidence, and the minute the confidence isn't there, that's when the attitude changes,' she said."

"In the past two to three weeks, as a number of high-profile hedge funds have collapsed and interest rates for some loans have shot up, a chilling, cautious mood seems to have hit the real estate community, even in Manhattan."

"'There's been so many declines in home prices around the country,' an economist at Yale University, Robert Shiller, said. 'Of course it could be reversed, but the more probable outcome is that it will continue, and I don't know that Manhattan can continue to be immune from that.'"

"Manhattan, with an average sales price of about $1.3 million, is especially prone to the spike in interest rates for jumbo mortgages, which have climbed nearly a half point in the past two weeks alone, according to Bankrate.com."

"'In a market like Manhattan, where so many of the potential purchases would require mortgages above the jumbo cutoff, it's inevitable that higher mortgage rates and a higher cost of capital will impact demand,' the senior economist at Reis Inc., Sam Chandon, said."

Reuters reports on New York. "At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price."

"On July 27, the end of a week when the Standard & Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home."

"Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fun losses and newly cautious lenders."

"'I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed,' said Kory, senior VP of the Corcoran Group."

"August is a slow time for real estate. Any slowdown will be difficult to detect for now, brokers said. 'It will be much easier to tell if there's impact a month from now,' said Frederick Peters, president of Warburg Realty."

The Democrat and Chronicle from New York. "Buyers appear to have gained the upper hand in the regional real estate market. New figures from the Greater Rochester Association of Realtors show that the volume of sales of existing homes slipped 1.9 percent in July from a year ago while the inventory of houses on the market continued to climb, up 2.9 percent."

"'The buyers recognize that at any given time there's inventory that's available,' said Earl Krakower of Coldwell Bankeer Prime Properties in Pittsford. 'They're taking a lot longer to make decisions.'"

"Gone are the days when multiple offers are put in on a home as soon as it is listed for sale, said Armand D'Alfonso, president and chief executive of Nothnagle Realtors."

"'It takes a lot longer to market a home,' D'Alfonso said. 'The buyers have more time and more to choose from.'"

The Boston Herald from Massachusetts. "Real estate broker Francis Adams has a condo sale set to close tomorrow, but fears the lender providing the buyer’s second mortgage might go out of business by then. 'I’ve been in real estate for 12 or 14 years and I’ve never worried before about a bank not (completing) a transaction,' Adams said. 'It’s scary.'"

"'The era of cheap and available credit for everyone has ended,' said economist John Bitner of Boston-based Eastern Bank."

"Experts say investors will no longer put funds into risky mortgages, leaving banks with little capital to make anything other than the most conservative loans. As a result, lenders are cutting back on many types of mortgages that Massachusetts buyers relied on during the housing boom to afford the state’s high home prices."

"'The game is over,' said Boston real estate broker John Ford. '(Banks) were just giving away money - but now, that’s stopped.'"

"For instance, Westwood mortgage broker John Brodrick estimates 70 percent of first-time home buyers he worked with during the boom years used 'piggybacking' to buy homes. But today, Brodrick said banks require piggybackers to have sterling credit scores."

"Experts say borrowers, likewise, need near-perfect credit for 'no-documentation' loans, payment-option mortgages and other products popular during the boom years. 'We’re going back to the basics of conventional lending,' said Kevin Cuff of the Massachusetts Mortgage Bankers Association."

"Eastern Bank’s Bitner, who previously predicted housing would bottom out this winter, now expects conditions to worsen until spring. He estimates median U.S. home prices will fall about 2 percent to 3 percent more by then."

"Housing economist Karl Case of Wellesley College is even more downbeat, saying prices could drop as much as some 7 percent going forward. 'We’ve got some ways to go before housing clears up - and taking out the subprime market doesn’t help,' he said."

The Eagle Tribune from Massachusetts. "Steven Calheta, an auctioneer from Irving Shectman of Pawtucket, R.I., stood outside 26-28 Washington St. on Wednesday, reading from a legal document that announced the foreclosure sale of the house behind him."

"The only person to show up was a representative of Wells Fargo Bank, which holds the mortgage. Bank agent Bob Scanlon bid $308,466.24, and the house was sold - back to Wells Fargo."

"Across the street, Guadalupe Martinez sat on the front steps of her ranch-style home. Four years ago, Martinez refinanced her $345,000 mortgage with Ameriquest. She got an adjustable-rate loan on her property, which has an attached, three-unit apartment building."

"Her monthly payments started out at $1,900 a month and most of that was covered by the $1,700 monthly rent she got from her tenants. Then reality struck, and the rates started to rise. Two years ago, her monthly mortgage payment began going up in $300 increments. Her most recent bill was for $3,300 a month."

"'There's no way I'm going to make that payment,' said Martinez."

"All over Lawrence, the Merrimack Valley, the North Shore and the rest of the country, homeowners are getting caught in the adjustable-rate mortgage bind."

"'I talked to Ameriquest, but they're so mean. They have no interest in helping people,' she said. 'Maybe next month, I'll have to move out.'"

"The foreclosure rate across the state is skyrocketing. In Essex County alone, the number of properties that face foreclosure auctions rose nearly 200 percent in the first six months of 2007 compared to the first six months of 2006. In that time period, 313 properties were up for auction in 2006. In 2007, the number rose to 920, according to the Warren Group."
"Every day is a clinic in the offices of the Neighborhood Assistance Corporation of America in Lawrence. Distressed or would-be homeowners have been streaming into the offices lately to speak with the director, Nelida Machicote, hoping to get a refinancing package."

"'It's gotten horrible, horrible, horrible,' said Machicote. Under NACA guidelines, people must meet certain income-to-debt ratios, and show that they've at least tried to make their mortgage payments."

"If they can't meet those guidelines and Machicote runs out of alternatives to help the homeowner, she counsels the person that 'it may be a blessing in disguise' that they are losing their home."

"'Their house may be worth $300,000 today, but homes around theirs are selling for $200,000 or $150,000,' she said. 'The value is going down.'"

"She said in many cases, the best option may be just to walk away from the property."

"Realtor Raul Ortega said many people these days are suffering from reverse sticker shock. 'People call and want to know the value of their property,' he said. 'Many are shocked when told that properties similar to theirs are selling for less. The market has changed - prices are being adjusted accordingly based on the sales.'"

"For some of the people, he said, 'the stress and worry is just not something they are willing to put up with. They just want to get out of it. They don't have the means to keep up the property. Plus, rents are more modest by comparison.'"

"For Martinez, who may lose her home on Washington Street in Lawrence, that may be the best choice. 'I've still got my job,' she said. 'I can go rent somewhere.'"