The Free Lance Star reports from Virginia. "Mary Anne Bryant is starting to see a new trend at the Central Virginia Housing Coalition in Fredericksburg. Landlords behind on hefty mortgage payments for houses worth $500,000 and up are seeking Section 8 status at her office. The federal program picks up 70 percent of the tab for qualifying renters."

"'They think that getting families in there paying a high amount of rent will save the house for them, but it's not working,' said Bryant. 'Four months later, the families have to move because the house is being foreclosed on.'"

"'We're guessing that they were bought by investors looking to flip,' Bryant said. 'Now that the market is going south, they're trying to sell but can't so they're renting instead.'"

"Lisa Swidrak, owner of First Savings Financial LLC in Fredericksburg, blames real estate companies and builders who opened their own mortgage companies to capitalize on the recent housing boom."

"'If you have a Realtor who says, 'You need to see my loan officer,' who do you think that officer works for? Not you,' she said. 'They're just trying to find a way to get you into that house. A responsible lender would have said, 'Where do you think the money is going to come from for your payments?'"

"'Actually, I have had quite a few cases where I don't know how they got approved for the loan in the first place,' said Tess Harris, a housing counselo in Fredericksburg. 'One client earned $23,000 a year and was approved for a $254,000 loan.'"

"Harris said the woman's initial mortgage payments were likely on the interest only, then ballooned to the current $1,695 a month at 12.25 percent interest. Yet she brings home only $541 biweekly plus child support."

The Times Community from Virginia. "The local trend could be best described as a market correction - not a crash - from the boom of the past four to five years, some local real estate and banking experts say."

"Berryville attorney J. Michael Hobert said he noticed, when reviewing county court records, that four foreclosures took place in June alone. 'That's a large number for a small community,'" Hobert said. 'I had never seen that many in the last few years.'"

"To find that high a number, Hobert added, 'You'd have to go back to the early 1990s.'"

"Reminding that real estate is typically a cyclical industry, predicted Traci Shoberg, president of the Blue Ridge Association of Realtors, 'It could just be the light-switch effect, just like it was going from a seller's to a buyer's market.'"

"The good news for buyers, but bad for sellers, is that home prices have gone down. The regional average sales price in June was $279,575 compared with $345,915 in June 2006. MRIS data shows that, in the price range from less than $30,000 to greater than $500,000, the average sales price in Clarke County dropped from $475,264 in 2005 to $431,956 in 2006."

"'Sales are extremely down,' said broker Victor Fath. 'There's a lot of investment opportunities right now. There was just a little too much greed in the marketplace two years, three years ago.'"

"Overbuilding contributed to the inventory glut, he added. 'They overbuilt in Loudoun County,' Fath said. 'That sort of affected everything up this way.'"

"George Ballew, mortgage manager in Winchester, said he has also noticed a slowdown in the whole region. 'I've noticed some prices falling as well, especially with the appraisals that we're getting for homes from $600,000 or $700,000 or more,' Ballew said."

The Baltimore Sun from Maryland. "Laurel Tokar made one of the biggest financial steps in her life a few weeks ago when she signed for a mortgage on her first home, a white Colonial in North Baltimore's Wilson Park."

"But the next day, her lender, American Home Mortgage Investment Corp., disclosed that it was bailing out. 'It was terrible,' said Tokar, 21, who managed to find another lender after a midnight paperwork session with her real estate agent. '"I couldn't really sleep.'"

"'The bottom line is, we have people who want to buy homes or who want to refinance, and we have to turn them away because of tightening credit standards,' said Tim Higgins, a loan officer in Ellicott City. 'They may have qualified for financing as little as a week ago.'"

"'It's absolutely going to be a mess. I've been in the business 24 years, and I've never seen anything like this,' said Sara Lenes, president of a Columbia brokerage. 'We're going to see more foreclosures, fewer people able to buy, and more houses sitting on the market for longer.'"

"William L. Yerman, chief executive officer a Baltimore brokerage, title and mortgage company, said he has been trying to persuade sellers over the past year that the market is not the same as it was in its heyday."

"'Sellers really need to have realistic expectations of what their house is worth,' he said. 'Can a changing mortgage market affect that? Absolutely.'"

"Home prices flattened in July in metropolitan Baltimore, as unsold houses swelled to a record and buyers faced tightening credit from a distressed mortgage industry."

"'Some houses have been on the market for so long that people have lost interest in keeping them up,' said Tina Marine, an agent with in Annapolis. 'They're grungy. The beds get stopped being made. People just give up.'"

"Stacey Wooden and her husband, David Schreiber, have had their Mount Washington home on the market for four months. The couple initially listed their home for $769,000 but eventually dropped the price by almost $70,000."

"The couple had hoped to move over the summer to enroll their two sons in school in North Carolina by fall. But despite several open houses, they have had just one offer."

"'We're trying to be pragmatic about things,' Schreiber said. 'There don't seem to be a lot of variables we have control over in the housing market.'"

The Bowie Blade from Maryland. "The number of Bowie area homes entering some stage of the foreclosure process has increased along with the national trend."

"'Bowie has had a substantial increase in foreclosures and notices of default because of the size and expense of many Bowie homes, combined with the modest, but inadequate, income of those purchasing these homes,' said John Burns, chairman of the Prince George's County Bankruptcy Laws Committee. 'We find a number of folks were put into mortgages that they never should have been put into in the first place.'"

"'No one discusses how they will pay their mortgage once it jumps up,' Burns said. 'You either have to sell your home, try to refinance at an affordable rate, or apply for bankruptcy. Otherwise, you're stuck as the odd man out in a never ending game of duck, duck, goose.'"

"Selling a house in today's market isn't going to be as easy as it was a few years ago during the housing boom. According to local real estate agent Jane Gregory, 'houses in the 20715, 20716 and 20720 ZIP codes are taking an average of 5.9 months to sell when three years ago they'd sell in less than a week.'"

"Despite the high levels of foreclosures and defaulting loans across the nation, one local real estate agent said that the Bowie area has not been hit nearly as hard as surrounding areas."

"Broker Boyd Campbell, who has worked in the Maryland, Virginia and D.C. markets for some 30 years, said Bowie is fairing well and is more stable than Northern Virginia and Montgomery County."

"'Appraisers have been more conservative in Prince George's County and investors haven't invested as much here as in those areas,' said Campbell. 'Now those investors are trying to get out of their investments and they're flooding the market. There's far more loan defaults, bank foreclosures and houses going to auction in those areas than here.'"

The Morning Call from Pennsylvania. "A Morning Call investigation in July showed that the poor performance of subprime lending is affecting the Lehigh Valley. Federal banking statistics showed that Lehigh and Northampton counties ranked first and second among Pennsylvania's 67 counties for the growth in subprime loans from 2004-2005."

"Furthermore, one nationwide study...showed that federal and state legislators were aware of problems with subprime lending in Pennsylvania since at least 2001, but that legislation to respond to the growing problem had stalled."

"In the past, Weaver of Deutsche Bank said, borrowers with these types of adjustable-rate subprime loans with low initial fixed rates used to keep refinancing when the initial fixed-rate period was over. And as long as home prices kept going up, this was not a problem."

"But now, 'the music is over,' said Karen Weaver, global head of securitization research for Deutsche Bank. Home prices stopped going up."

"The borrowers who face higher payments for subprime adjustable-rate mortgages with two-year fixed-rate periods are going to be people who took those loans out at 'exactly the wrong time,' said Weaver. And they are 'just going to get hammered' between the decline in home prices and the clampdown on credit, she said."

"The number of homes that were sold fell year-over-year for the 14th consecutive month, according to statistics released by the Lehigh Valley Association of Realtors."

"Other statistics suggest these trends will continue. New listings of available homes rose 9 percent last month to 1,615 units. The number of pending sales contracts, an indication of future sales activity, fell to 554 homes, the lowest level since February."

"The outsize increases in prices and the fast pace of sales that became common during boom years of 2004 and 2005 are now securely in the past."

"'Anyone who just bought a house, hopefully, they are in it for the long haul,' said independent appraiser James Keim."

"Keim, who appraises homes in Lehigh and Northampton counties, soon expects to see asking prices for some homes to dip below what similar models sold for earlier this year. It's likely to happen in suburban areas where many homes have not sold quickly, he said."

"The lull comes after blockbuster years, in which low interest rates and an influx of people from New York and New Jersey brought new buyers into the market and sent prices soaring."

"Another development that has limited the number of buyers is a tightening of borrowing regulations. 'It is eliminating probably 20 percent of the market,' said Jeff Burnatowski, an agent in Allentown."

"Burnatowski and other real estate agents say the drop in sales has changed how they deal with their sellers. For example, sellers should consider all offers because, as Burnatowski said, 'who knows when the next will come by.'"

"'Sellers remember 2005, when homes were flying off the shelf,' he said. 'Sometimes they still expect that. It is not the same market.'"