The Boston Globe reports from Massachusetts. "A growing credit crisis is prompting lenders across Massachusetts to cut back suddenly on new loans, making it difficult for even creditworthy borrowers to get mortgages and causing some home sales to fall through at a time when the housing market is already slumping.The most prevalent impact in the Bay State so far involves borrowers with good credit now having trouble getting jumbo mortgages, which are popular in Massachusetts because of the high price of housing."

"Keith Shaughnessy, president of Foundation Mortgage Corp. in Littleton, said the mortgage market "is moving right beneath our feet. The new story is people with good credit are now having a tough time getting a mortgage."

"Several mortgage company executives have said they have never witnessed such a sudden cutoff in credit, and analysts predicted the drought and subsequent turmoil may continue for several months."

"Fed officials 'could've helped the regional mortgage lending environment had they moved' rates down, said Kevin Cuff, president of the Massachusetts Mortgage Bankers Association. The mortgage market, he added, is 'in disarray.'"

"In July, mortgage sales plunged to $11.2 billion nationwide, from $41.6 billion in June and $92.2 billion in May, according to FBR Investment Management, which tracks the data."

"The mortgage problems are also cutting into home sales at a time when real estate prices and home sales are in decline. Allison Horne, owner of Dynamic Capital Mortgage Inc. in Brookline, said one client with $200,000 in savings wanted to buy a $1 million home in Boston's South End, but had trouble lining up a mortgage."

"The market turmoil 'has totally affected people's decision of, 'do I want to do this,' Horn said."

From NPR.org in Massachusetts. "Eight years ago, Jose Pomales moved into his modest ranch house in Boston's Hyde Park neighborhood. He says he has always paid his mortgage, but two years ago, Pomales refinanced and got a loan from New Century."

"The monthly payment on Pomales' $300,000 loan started at about $2,100. Then, the payment increased by more than $300 a month, and will soon be adjusted to about $2800 per month. In another six months, his mortgage payments will be increased even more."

"Pomales says he had no idea how much his monthly payments would go up and is now unable to afford his home. His only option, he says, will be to either try to sell the house or just let the bank take it."

"I foresee several million. I think that we could easily see 2 to 3 million people lose their homes and go back to renting, basically," says Bill Wheaton, who runs MIT's Center for Real Estate."

"He says that some of those affected will be people who paid too much or borrowed too much against their homes. If their payments are rising and the houses are worth less than they owe, they'll just walk away, Wheaton predicts."

"Pomales worries that without refinancing, he will soon be forced to leave his longtime home. 'We're just regular middle-class, hard-working individuals, and you hate to see things taken away when you're working hard for it,' he says."

The Post Gazette from Pennsylvania. "Chuck Sanders, CEO of Penn Hills-based Urban Mortgage, a mortgage broker specializing in helping home buyers with blemished credit histories, summarized the impact of the turmoil in mortgage markets with one word: 'Ow!'"

"While severely distressed lenders have stopped making loans altogether, Mr. Sanders said, the truly painful part is that lenders who remain solvent are 'really tightening the screws' in qualifying customers. In July, six of 25 loans that he had expected lenders to make to his customers fell through."

"'It's a rough market; there's no way around it,' he said."

"And the worst may be yet to come. Mr. Sanders believes that 'a couple more national major lenders' may close their doors, and he hopes, 'optimistically,' that the turnaround may come in the second quarter of 2008."

"'But I've heard doomsday as far as three years out,' he said."

The Tribune Review from Pennsylvania. "The credit crunch in the national mortgage market is hitting the Pittsburgh region. 'The underwriting criteria is changing daily and getting tougher for borderline borrowers,' said Brad McLean, a Strip District mortgage lender."

"The housing industry is tightening as more homes remain unsold, said McLean, president of the Mortgage Bankers Association of Southwestern Pennsylvania."

"Even credit-worthy customers are feeling the effects. 'You are seeing a movement to full verification on loans,' said Mark Steele, president of Howard Hanna Financial Services. 'You verify someone's employment with the employer, and you would verify what their income is.'"

"'The industry fell into the trap, quite frankly, where they were doing loans that they were told what the income was, and made some difficult loans that aren't performing right now,' he said. 'Now, you are going to give me income tax returns or W2s to verify what you are making.'"

"'We are lucky in the Southwestern Pennsylvania region that this region did not experience the tremendous appreciation in housing values that other sections of the country had,' said Steve Madden, branch manager of Countrywide Home Loans Monroeville office."

The Union Leader from New Hampshire. "New Hampshire will see foreclosures continue to increase into 2008 as subprime mortgages continue to fail, a study released yesterday said."

"Foreclosures will hit the real estate market, cutting demand for homes by 10 to 15 percent through 2008, Brian Gottlob's study said. He warned that if housing prices fall by 10 percent, foreclosures will increase by about 80 percent."

"The reason behind this rash of foreclosures is different from the 1990s housing market collapse. Rather than a weak economy, the loans are going bad because they were risky to start with, as housing prices rose and mortgage companies rushed to lend money to borrowers whom banks rejected."

"The number of subprime mortgages in the New Hampshire market increased more than ten-fold since 1999, from 1,700 loans to 22,000 by early 2007. Gottlob said mortgage credit quality has been eroding for the past two years as housing prices stagnated and began to fall."

"His figures show 19 percent of subprime borrowers are behind on their mortgage payments, compared to 2 percent of more traditional home loans."

"The subprime industry has collapsed in recent weeks as investors refused to buy packages of risky mortgages out of fear they would turn into bad loans. Gottlob agreed that if troubled borrowers can't refinance their existing subprime loans, 'you'd be in essence dooming them to foreclosure.'"

The Concord Monitor from New Hampshire. "When real estate agent Bob Pratte started selling homes in the new Stinson Hills development in Dunbarton, four houses sold immediately. Then, at the beginning of last summer, sales stopped. 'I'd go there on weekends, and no one would show up,' Pratte said."

"For several years, prices were rising fast, and ultimately people could no longer afford it, he said. 'The market is still adjusting. There was a drastic change,' he said. 'The whole country had a dip, and in New Hampshire, it had to happen sooner or later.'"

"The town has at least four residential developments that were approved but have not been built, said Ken Swayze, co-chairman of the Dunbarton Planning Board. 'I've been on the planning board about 10 years, and this is one of the slowest periods I've seen for projects to start up,' he said."

"Swayze said the conditions remind him of a recession in the 1980s, when several projects were also approved but never went forward, including one that is now being revived. 'It's the same thing - market conditions, economics,' he said."

"The major difficulty facing sellers in Dunbarton comes from the homes' prices; new houses tend to cost around $400,000, putting them squarely into the segment of the market that has been hardest hit, according to Tim LeClair, associate broker in Concord. LeClair said luxury homes and starter homes have been moving, but those going for $300,000 to $500,000 have been tough to sell."

"'A good number of those people are spending as much as they can spend,' LeClair said. 'When you read about housing prices coming down, interest rates going up, foreclosure at record numbers, it makes people wary of making that kind of investment in a house. People remember the late '80s, early '90s, when your $300,000 house was almost overnight worth $250,000.'"