The Record Searchlight reports from California. "August home sales in Shasta County were down 8.8 percent from a year ago. The number of homes sold in August was the fewest since August 1997, when 185 sales were recorded, DataQuick reported. Meanwhile, there continues to be a glut of home listings. Bill Parsons, who owns Parsons Realty in Redding, said it continues to be a frustrating time for sellers."

"'Sellers were concerned in the past that maybe it was something their agent wasn't doing. Now they are beginning to realize it's the market,' Parsons said."

The Mercury News."Generally,appraisers perform their valuations for lenders to help determine whether the collateral is adequate. If it indicates they sold for less than the appraiser's estimate of true market value, they are none the wiser. Nobody in the transaction has any incentive to break the bad news to them."

"'It certainly puts us (appraisers) in an uncomfortable position when we find that the selling price is below market value,' says Karen J. Mann, a veteran appraiser in the Brentwood-Discovery Bay area east of San Francisco. 'We wonder what's going on out there - are sellers giving in to the bottom-feeders' who are trolling for any hints of distress or urgency?'"

"Not all appraisers are surprised that appraisals are beginning to come in above contract prices. Gary Crabtree in Bakersfield, says bloated sales prices over the past five years, plus hidden concessions and fraud, 'have distorted the data' and the public records in some parts of the country."

"'When mortgage fraud and concessions get built into' local recorded sales prices and tax assessments, he suggests, those inflated values 'become the new comparables' that appraisers use. In effect, hard-bargaining buyers today may be squeezing some of the cotton candy fluff out of prior sales."

From KCRA 3. "The alleged mortgage fraud exposed by KCRA 3 is having a direct effect on property values in Elk Grove. All of the homes at the center of our investigation are now in foreclosure, and property values are plummeting."

"Jim Martin and his business partners are accused of falsifying millions of dollars in loans. all those homes -- more than $9 million in real estate -- are now in foreclosure and having a negative effect on property values in those neighborhoods."

From ABC 7 News. "There's no greater evidence of the mortgage crisis than here in the San Ramon office of Diablo Funding Group, where President Bill Erb has had to lay off two-thirds of his 196 employees in just the past year."

"'These steps, the fed lowering the rate by half a percent is not going to make everything okay,' said Bill Erb from Diablo Funding Group. 'The fact that interest rates come down a little bit, whether you have an 11 percent loan or an 11 half percent loan, when you're coming off a six and a half percent loan, probably isn't going to help you much,' said Erb."

The Ventura County Star. "In an effort to entice buyers, Standard Pacific Homes is staging an aggressive campaign called 'Mission: Possible' to sell 200 homes across Southern California over a 10-day period, ending Sunday. A clear obstacle to moving those homes has been the depressed housing market. Sales have plunged over the past year in Ventura County and Southern California."

"Alonso Escamilla, a property manager, owns two houses in Santa Barbara, but he's looking for something more economical. Since the interest rate on his jumbo loan adjusted upward, his payment has become sizable. By selling one of his homes, he wants to be able to put 10 to 20 percent down on a $450,000 house."

"'I don't want to leave Santa Barbara,' he said. 'But it's either struggle, or move and live comfortably.'"

"This summer, JM Development permanently reduced prices by $80,000 at Henderson Cottages, a new 28-home community in east Ventura. There are 17 properties still available. 'Realistically, would we do what Standard Pacific is doing? Come talk to us. We can give you a deal of the century,' or mission possible.' We can do the same thing.'"

The Acorn. "Home sales in Ventura County continue to drop, and home prices are just beginning to sag, but exactly how long the real estate market will stagnate and how low home price will go is still a question mark, according to a group of speakers at a recent Ventura County Real Estate and Economic Outlook Conference."

"'The number of foreclosures is surging and will soon reach unprecedented levels,' said Mark Schniepp, director of California Economic Forecast, in a book produced for participants. Schneipp predicts Ventura County real estate will level out and experience a total price drop between 10 and 15 percent, he said. Not bad if predictions on other California real estate markets are expected to dip down 18 percent."

"The current real estate slowdown shouldn't be compared to the recession in the 1990's, Schneipp said. At that time, the downturn carried on for 71 consecutive months, resulting in a 27 percent drop in prices. Schneipp said it seems 'unreasonable and improbable' that history would repeat itself in such a cycle."

The Napa Valley Register. "The Napa City Council approved the conversion of the 38-unit apartment project to ownership housing Tuesday. Two-bedroom condos will sell for between $280,000 and $320,000, making them by far the cheapest entry-level housing in the city, said Randy Gularte, a Realtor advising the Cadillac Flats project."

"Sue Dee Shenk, executive director of Napa Valley Community Housing, doubted that many of Cadillac Flats’ tenants, who now pay $1,000 a month, would be buying condos that carried mortgage, interest, taxes and fees of $1,800 a month. Buyers will pay condo dues of $260 a month, Gularte estimated."

"Norbert Doran, who built Cadillac Flats 15 years ago, countered that $1,800 was a great deal. Buyers would have their own home, with values rising over time, he said."

From NBC San Diego. "What was once the county's fastest-growing city has suffered a financial setback. On Wednesday, Chula Vista had its credit rating lowered a notch by Wall Street. For a time, new homes and business generated millions of dollars in new taxes, but the financial tide has apparently turned."

"Scott Barnett of TaxpayersAdvocate.org told NBC 7/39 the city should have known the cash flow would not remain unchanged. 'This is not like cancer, or a plane crash, this is something that's self-inflicted,' Barnett said."

"The new city manager David Garcia told NBC 7/39...the real estate bubble burst has hurt cities everywhere. 'Chula Vista is at the heart of the sub-prime mortgage crisis right now. We have some of the top foreclosure rates in San Diego County. And San Diego County is the top 100 in the country.'"

The North County Times. "The recent surge in housing foreclosures is creating new headaches for Escondido's code enforcement officers, who say they are struggling more than ever to contact homeowners who have broken windows, out-of-control shrubbery or scummy swimming pools."

"'Things really slow down when you start dealing with the banks, because they seem to be struggling with these situations just as much as we are,' said Greg Smith, one of 13 code enforcement officers in Escondido."

"Smith said the city boards the houses up to prevent homeless people from living in them, to prevent teens from partying inside and to avoid health and disease problems that could result from neglected pools or abandoned food left inside. Bank officials typically agree with the decision to board the homes up, he said."

"The foreclosure epidemic, which officials blame on gimmick loans given to marginally qualified buyers, is not unique to Escondido."

"About 200 Escondido homes are now in the midst of foreclosure proceedings, and banks and mortgage companies have become the official owners of more than half of them, according to data on foreclosureradar.com."

"Smith said the foreclosed properties that have drawn complaints are spread throughout the city, adding that they also range widely in price. 'I've seen everything from $900,000 homes down to $300,000,' he said. 'And it's all over town.'"

"A mood of gloom has settled on California in the past few months, with foreclosures and tightening credit causing more residents to see bad times ahead than at any time since 2003."

"Economic pessimism jumped by 20 percentage points since the beginning of the year, the poll found, with 59 percent of residents saying they expected bad economic times in the coming year. Among 'likely voters,' 62 percent were pessimists."

"Worriers outnumbered optimists in every region of the state, every income bracket and among homeowners and renters alike. That is unlike typical responses during this stage of an economic downturn, said Mark Baldassare, PPIC president and the survey's director."

"'The anxiety is coming from the insecurity created by housing and credit market turbulence and the impact that has on homeowners and would-be homeowners,' Baldassare said."

"In 2003, when PPIC reported the last steep dip in consumer confidence, the invasion of Iraq was on people's minds. Yet homeowners dug into their equity lines and low interest rates made spending on credit easy, and the economy continued improving."

"'What has people a little bit worried now is not just what their homes are worth, but what it is going to mean to borrow,' Baldassare said."