The Boston Herald reports from Massachusetts. "Bank of America, Wells Fargo, Lehman Brothers and other financial powerhouses are threatening to pull out of the wholesale mortgage-lending market in Massachusetts because of Attorney General Martha Coakley’s proposed new mortgage-broker regulations, the Herald has learned."

"Such lenders account for about one-third of all mortgage loans issued in Massachusetts."

The Boston Globe from Massachusetts. "This is what real estate fever looks like in a down market. Almost 300 foreclosed Massachusetts houses will be auctioned at the Hynes Veterans Memorial Convention Center this weekend."

"The properties for sale are mostly remainders. 'They don't tend to be in the best condition,' said Terryanne St. Pierre, an associate broker in Salem. 'They've been abused more often than not,' St. Pierre said."

"But the 2,000 or so people who attended yesterday's auction were undeterred.After each property was introduced, men in tuxedos rushed around encouraging people to spend money."

"'Hey, that guy is about to buy your home!' one auctioneer told a hesitant couple. 'What's another $10,000?'"

"Properties sold in a few minutes. Winners were escorted to a roped-off area to make a 5 percent down payment, for example, on a $300,000 house - the cashier's check plus a personal check for $10,000. They were then escorted to an area behind curtains to qualify for a mortgage loan from Countrywide Home Loans."

"Melissa Ferreira came to Hynes yesterday morning to buy her first house. The 28-year-old newlywed raised her paddle repeatedly as the price rose to $330,000. When the auctioneer stopped rapping and Ferreira realized she had won, she wept."

"'I'm an emotional wreck,' she said. 'I cried because I almost didn't get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.'"

"A Victorian-era house on Washington Street in Norwood sold for $585,000 in July 2004. It sold yesterday for $350,000 to a group of four friends, investors who said none of them had seen it. They bought it, they said, because it seemed like a good deal."

"The house has 2,800 square feet of space, with five bedrooms and a large backyard. Now, however, the polished wood of the living room floor is ruptured in several places, perhaps by burst pipes. The smell of a moldy basement permeates the house. Something with sharp teeth savaged the woodwork. The fire alarm chirps endlessly."

"Chris Willis and Eli Sanchez were willing to pay $100,000 for a West Yarmouth ranch they considered a teardown. The bidding soared past $100,000 in a matter of seconds. The place eventually sold for $200,000, leaving Willis shaking his head. 'They're basically buying land,' he said. 'It makes no sense.'"

"Mike Gubla, a New Bedford contractor, also decided that the prices were too high. 'There's civilians bidding here,' he said, explaining that inexperienced buyers were paying more than properties were worth. 'I'll come back next year, and the prices will be better,' he said."

"Ferreira saw her dream house for the first time last Sunday. She said she spent the rest of the week nearly paralyzed by nervous anticipation. Yesterday afternoon, her bid accepted on the house, she paced the financing room in high spirits, waiting for permission to leave."

"She said she planned to drive to the house directly. 'And when I get there,' she said, 'I'm going to throw up my hands and tell anyone, 'This is mine!'"

Hartford Business from Connecticut. "Connecticut’s perceived immunity to the nation’s housing market slump and credit crunch is over. Reports published last week by Boston-based Warren Group reveal...a double-digit decrease in home sales along with an alarming number of foreclosures — at 2,948 — in Hartford County alone, reflect the state’s fractured housing market."

"Statewide, there have been 12,575 foreclosures, with New Haven County hardest hit with 3,914 foreclosures."

"While home sales have plummeted in the past, state officials do not recall when the number of foreclosures has been so great. 'We’re concerned because this is not a typical situation,' said Howard Pitkin, commissioner of the state’s Department of Banking. 'This is not something that has happened frequently in the state, and we need to address it.'"

"Although foreclosures are now exploding in Hartford County, the writing was on the wall for several months. 'We saw it coming. I should say, we dreaded it coming for a while,' Pitkin said."

"There are an estimated 71,000 subprime mortgages in Connecticut worth approximately $15 billion, and it is possible that up to 8 percent of those loans are delinquent, he said."

"The seeds that started the current financing fiasco were created during the fiscal climate that followed the Sept. 11 terrorist attacks, Pitkin said. 'It happened because the Federal Reserve brought about a credit scenario that had been unheard of,' he explained. 'Wall Street showed a willingness to buy pooled obligations, and mortgage brokers could borrow money cheap.'"

"Another contributing factor, according to Realtor Nicholle Dagata in Berlin, is that buyers also borrowed their closing costs. 'These are people who saw their mortgage payment go from $1,200 to more than $2,000,' she said. 'This has happened in Farmington, New Britain and Berlin. It’s not just isolated in the big cities.'"

From Newsday in New York. "As Long Island's economy and housing market boomed, tens of thousands of area residents saddled themselves with expensive mortgages, borrowing billions of dollars and counting on the equity in their homes to help pay their bills and build their wealth for them."

"Now, that foundation of home ownership for many is crumbling, and the Long Island economy could pay the price. Nearly a third of the 107,000 mortgages given to Long Islanders in 2006 were high-cost loans...and are far more likely to go into foreclosure than their conventional counterparts, a Newsday analysis has shown."

"Already across the region, home foreclosures are sharply on the rise, often doubling in the last two years in communities from Roosevelt to Westbury and Brentwood to Deer Park, Newsday found. In Brentwood, the number of initial foreclosure notices rose to 227 in the first six months of 2007, from 98 in the first half of 2005, while Glen Cove went from 10 to 24 filings in the same period."

"Kari Sessa refinanced her childhood home in Huntington Station in 2005 and now may lose it. Kari and her husband, Keith, have owned the cape since 2002, when they bought it from her mother's estate for $301,000. At the time, they had a mortgage payment of $2,100 a month, which they said they could manage."

"But after a call from a now-defunct Melville mortgage broker, the Sessas decided to refinance to consolidate their debt. While acknowledging that they made their own mistakes, such as not carefully reading paperwork or bringing an attorney to the closing, they said they thought the mortgage would be one 30-year fixed rate loan."

"But instead, they received two loans. That left them with a new monthly payment of $3,354, about $500 more a month than it would have been with a conventional, 6 percent rate loan. To make the payments, both Kari and Keith began working two jobs. Yet, the couple is still paying nearly half their income toward the mortgages. And, come March, their larger mortgage payment will rise sharply, adding another $800 a month."

"All told, over the life of their 30-year loans, the Sessas will pay $500,000 more than if they had gotten one 30-year prime, fixed-rate loan."

"Twice in the last year, the couple has fallen behind on their payments, only to dip into retirement savings to catch up. 'We should have left it the way it was,' said Kari Sessa. 'We didn't know this was going to happen.'"

"Business owners across Long Island have long depended on the cash flow of the local consumer. Now, because of the housing slump and subprime loan crisis, there's less money for homeowners to spend."

"Even the loss of two regular customers can make a difference, Americo Araujo said. Middle Island residents Rita and Larry Schel used to frequent Araujo's Italian restaurant as many as five or six times a week. When Larry Schel became ill and the couple began to fall behind on their mortgage payments, they stopped coming."

"'When you lose a customer like this, it's no good,' Araujo said. But it's more than just the Schels. Araujo reported that business is off 40 percent compared with last year, and he sees a direct link between the rise in foreclosures and his restaurant's downturn."

"'People aren't spending money like they used to be,' he said."

The Courier Times from Pennsylvania. "Brad Elliott said weeks ago that he'd learn the value of the bankrupt Elliott Building Group's assets at an auction for its 14 planned developments, including The Preserve at Hilltown and Abington's Rydal Waters."

"Now he knows. 'It was a bust,' said Elliott, whose Falls development company filed for Chapter 11 protection in June."

"Elliott said Monday that only two of the projects sold; Glen Meadow in Gloucester County, N.J., and the Ridings at Brandywine in Chester County. The others now belong to banks, which could choose to sell them or finish construction."

"'The bids were coming in, most had more than one, but the highest bids were 50 cents on the dollar,' Elliott said. 'They were bidding half of what the debt was...The current building community has enough inventory.'"

"Infrastructure improvements were 80 percent finished at Rydal Waters, he said. Both developments were slated to sell homes for $600,000 or more."

"Elliott said some buyers made deposits on the Hilltown and Abington homes. Most who made deposits have been unable to get that money back because it wasn't put in escrow accounts, the developer said. He would not say how many but added they have been added to the list of creditors in the bankruptcy proceeding"

"'The Elliott Building Group will be liquidated and shut down and [I'll] be looking for a new venture after I get through this mess,' said Elliott."