The Statesman Journal reports from Oregon. "Two years ago, Staci Brigham and her husband wanted out of their adjustable-rate mortgage and sought to replace it with an interest-only loan. They hoped to keep payments down and planned to sell their Woodburn home once she finished school at Oregon State University. Brigham said instructions to their loan officer were clear: they didn't want another adjustable-interest mortgage; they didn't want a penalty for paying the loan off early; and they didn't want a 'negative-amortization' loan."

"They were shocked later to find the new loan included all three features. 'When we called to confront (the loan officer), he hung up on us,' Brigham said."

"Monthly payments have since jumped more than $300, and the couple is locked into the loan one more year because of a $9,000 prepayment penalty."

"Oregon's relatively high real-estate prices, combined with its modest incomes, help explain why the state has the ninth-highest use of interest-only mortgages in the country, and the seventh-highest use of negative-amortization loans, according to First American data."

"David Tatman, the state's chief banking regulator, said interest-only loans are 'facilitating the American dream of being able to buy your own home.'"

The Bellingham Herald from Washington. "The latest Whatcom County home sale numbers appear to be sending mixed messages as the area adjusts to a changing real estate market. According to a report released Wednesday, September saw a significant slowdown in sales, leaving real estate professionals to ponder what this means for the rest of the year."

"In Whatcom County 196 homes were sold, down 21 percent compared with September 2006, while Bellingham was down 24 percent."

"'Whether we can avoid the median price declines being experienced in many other parts of the country remains to be seen,' said Julie Hansen, an economics professor at Western Washington University. 'The strength of the Canadian dollar is certainly a positive factor for our local market; in the coming months, increased demand from Canadian buyers could help sales recover from last month’s slowdown.'"

"'What’s been interesting is that the inquiries have been for both second homes and primary residences,' said Lylene Johnson of The Muljat Group South office in Fairhaven. 'There are Canadians who can’t find affordable homes in Canada and are willing to commute from Whatcom County.'"

The Port Townsend Leader from Washington. "When Kevin and Amanda Adams lose their Port Townsend home to foreclosure in a few weeks, they won't be alone. Every 30 seconds, another American family loses a home to foreclosure. That's more than three times the rate of foreclosures just two years ago, according to RealtyTrac."

"Kevin and Amanda bought their home for $160,000 in February 2005. They financed it with two fixed-rate loans with a combined payment of $1,300 a month."

"Amanda's dream was to open a day care and stay home with their own two kids. They refinanced the home to start the business, borrowing $270,000 with a 15-year, interest-only loan with payments of $2,000 a month."

"After six months, she realized that her dream job wasn't going to work out after all, and she closed the day care. Early this year, Kevin lost his job as a private security guard. Soon they were behind on their mortgage payments and their real estate investment was upside down: Their mortgage balance was more than the value of their home in today's market."

"A real estate agent said they could try listing the house for $269,000, but their out-of-pocket costs would have been at least $6,000."

"'Shit happened and we lost our house,' said Amanda, fighting back tears."

"'So now we're going from a 1,700-square-foot house to a single-wide mobile home,' said Amanda. 'We're OK with it. I hate this house right now - it's caused so much stress for our family.'"

"Carol Fletcher, a broker at Hadlock Realty and Development Co., bought a rental home with a mortgage payment of $1,000 a month two years ago. 'I got a notice the other day,' she said, that the payment on her adjustable rate loan is going up to $1,360."

"'Where does a person come up with the additional $360?' she asked. 'You can only hold on for so long.'"

"She's hoping to refinance, but other people won't be so lucky, she said, especially when their property taxes go up as well."

"'Don't fall for sucker loans,' said Laura Piper, owner of Consumer Credit and Debt Counseling Service of Port Townsend. 'We're getting so many people with adjustable rate mortgages.'"

"Better yet, Piper said, 'Don't get over your head in the first place.'"

"Puget Sound area real estate prices have for the most part been holding steady while other areas of the country have seen some homeowners left with no equity. Nonetheless, the proliferation of signs reading 'new price' or 'price reduction' suggest it's no longer a seller's market in Jefferson County."

"'There's some screamin' deals out there,' said Nick Harper, a real estate agent (in) Port Townsend."

"According to Harper, there are many more homes for sale in Port Townsend today (128) than a year ago (60). And during the first eight months of 2007, the number of sales nearly matched the same period in 2006 (92 versus 103). Having twice as many homes for sale and slightly fewer homes being sold works in favor of buyers, he explained."

"What we have, he said, is 'a lot of homes that need to be sold. I think we're definitely at the bottom,' said Harper." "Some sellers, Harper said, are 'still hanging on to last year's prices.'"

"In August 2007, the median price of homes sold was $380,000 in Port Townsend and $365,000 in Jefferson County, according to the Northwest MLS."

"Income tax deductions take some of the sting out of investment property cash-flow requirements, Harper said, but the biggest potential return on investment comes from property appreciation."

"'Don't you wish you bought two houses five or 10 years ago?' Harper asks of anyone who's been a small-time landlord in Port Townsend. 'In three to five years you'll be tickled pink,' he said of buying investment property today."

"It's common to assume that a house being foreclosed is a good deal, said Harper, but 'why didn't they sell it before it was in foreclosure?' It could be that the house is worth less than the outstanding balance on the mortgage, he suggested. Or maybe there's an issue with the house that isn't readily apparent from the outside."

"Harper urges caution for first-time buyers and those who might not have the resources to deal with surprises that could come after making the winning bid on the proverbial courthouse steps."

"'You don't want to buy something that's overpriced,' agreed Carol Fletcher, who owns Hadlock Realty and Development Co. A current appraisal by a local appraiser is one way to address that concern. But even then, she said, a foreclosed home can be a bit of a pig in a poke."