The Baltimore Sun reports from Maryland. "The local housing market ended its second full year of the downturn in a worsening slump, with year-over-year sales in December falling 30 percent for the fourth month in a row. For local sellers, the problem hasn't been merely falling demand. Supply rose, too. The average number of unsold homes in any given month last year topped 18,000. That's by far the largest number on record."

"Now subprime and other 'exotic' loans have all but disappeared because lenders - pummeled by rising foreclosures - pulled back. Just before Melissa Talbot and husband Aaron, put in a bid on a condo in October, their bank canceled the no-money-down program they were planning to use. They ended up borrowing from their retirement funds and going with a lender requiring a 5 percent down payment."

"Since they moved in, the lender stopped offering that program, too. 'I'm really glad we were able to buy when we did, because I'm not sure we could afford it now,' said Melissa Talbot."

"Realtor Chris Traczyk keeps hearing from his buyers that they want to continue looking and wait for better deals. He's certainly hoping for an upswing in demand: He's rehabbing city homes with a partner, and it's starting to look like a break-even situation at best."

"A house they renovated south of Baltimore's Ashburton neighborhood has drawn no offers since it went on the market three months ago. The first asking price was $325,000. That dropped to $286,000. Now Tracyzk is asking for $260,000."

"'It's probably going to be a loss,' he said."

Reuters reports on New York. "Eileen Anderson runs two NeighborWorks counseling centers on suburban Long Island, outside New York City. The number of calls to Anderson's offices rose more than tenfold in 2007 from the year before, and since October more than half of those calls have been referrals from HOPE NOW, she said."

"While the HOPE NOW alliance puts troubled borrowers in touch with counselors, both counselors and borrowers complain it offers no financial help. 'There's no money, nobody has emergency funds. Clients who are calling are desperate,' Anderson said."

"Agnes Kallon and Bai Turay, a Staten Island couple...have a combined income of $39,000 and six children to support. In 2005 they took out a mortgage for a $412,000 house with a low introductory rate, based on their mortgage broker's assurance that they would easily be able to refinance when the rate went up."

"But when their mortgage payment reset to $3,000 a month, far beyond what they can afford, that assurance didn't hold up. 'If we lose the house, what will happen to the kids?' Turay told Reuters. 'These brokers are profiting from other people's misery.'"

Long Island Business News from New York. "The subprime meltdown is leading borrowers to fight back, suing for predatory lending practices and violations of the Truth in Lending Act. 'I’ve seen an increased number by subprime borrowers who are either in foreclosure or on the brink of foreclosure bringing these actions,' said David Scheffel, of counsel at Farrell Fritz in Uniondale."

"Kari and Keith Sessa in 2002 achieved their version of the American dream when they bought the Huntington cape she lived in as child. They’re now among the thousands facing an American nightmare and deciding whether to sue."

"After seeking a home equity loan, the Sessas walked out with a refinanced mortgage and a second loan through Global Home Loans and Finance in Melville (no longer in business)."

"She said her lawyer said that it doesn’t make sense to sue the mortgage holder, unless they face foreclosure. The fact that the firm that arranged the mortgage is gone makes legal action tougher."

"While the Sessas’ mortgage holder agreed not to jack up rates for two years, they still haven’t agreed to turn it into a 30-year, fixed-rate mortgage. 'It’s stalling foreclosure,' Sessa said. 'That’s all that’s doing.'"

From Newsday in New York. "More than $14.6 billion worth of homes was sold last year, compared with $16.5 billion in 2006, a drop of almost 12 percent, according to figures released yesterday by the MLS of Long Island."

"The area's real estate market didn't freeze up this past year, like those in other states, but continues to soften, with some sellers dropping prices, others taking their homes off the market and buyers waiting for rock-bottom prices before making their moves, industry veterans said."

"Agents and brokers say many sellers have realized they can't demand the boom-time prices anymore; the median price of homes on the market dropped from $500,000 a year ago to $480,000 last month, a 4 percent difference. Homes are piling up on the market, taking longer to sell because buyers think prices will probably go down further this year, as experts have predicted. December had 30,854 homes for sale, up from 27,446 a year ago."

"Last year's 3 percent drop in listings could indicate a reluctance by some potential sellers to put properties up for sale when they probably won't get the profits they want."

"'Those who are serious about selling, sell,' said Mohsen Zandieh, president of the Long Island Board of Realtors. 'Those who are determined to get a certain amount in their pockets, they wait for the market to change to the number they want to see.'"

The Boston Globe from Massachusetts. "Housing prices in the Boston market peaked in September 2005, according to the S&P/Case-Shiller Home Price Index. As of October 2007, the market was down 7 percent from its peak. But the latest drop has only rewound the markets back to the summer of 2004."

"There also is a longer view of the future. The Joint Center for Housing Studies at Harvard University noted in its annual survey that a rebound is inevitable, even if the timing is unpredictable."

"Over the next decade, the report said, the combination of a growing population and rising wealth, 'will help propel residential spending to new heights.'"

"Eric Rosengren, president of the Federal Reserve Bank of Boston, told a Hartford audience that the current housing slump could be the longest in 50 years, increasing the risk of a broader economic downturn."

"Rosengren said spending by home buyers has declined in every three-month period since the beginning of 2006, and likely will continue to fall through at least June 2008. That would be the longest downturn since 1958."

"'The trend toward securitizing mortgage loans allowed the financing arrangements to be driven by national rather than regional conditions,' said Rosengren. As a result, regional problems - which once had a regional effect - now reduce the availability of loans nationwide."

"The best response, Rosengren said, is to calculate and accept losses as quickly as possible. Banks should report and close the books on bad loans, and home sellers should accept the need for price cuts, drawing investors and buyers back to the market with the prospect of new profits."

"Art Foley, a Quincy real estate broker, said many sellers on the South Shore seemed unwilling to cut prices. As a result, while prices in the Boston area have held relatively steady, the number of sales dropped sharply in recent months, suggesting buyers are waiting for larger price cuts."

"'A good real estate broker today will walk away from a lot of listings they could have because the seller is not being reasonable on the price,' said Foley."

"He said some agents joke that it is best to be the third agent to work with a seller, because after the seller fires the first two, he might be more willing to listen to the argument that the price needs dropping, and not the agent."

The Providence Journal from Rhode Island. "Landlord Charles Oertel owned 10 rental properties around East Providence. Oertel said that he and his business partner, William Shawn Prunty, built their real-estate portfolio with risky subprime loans."

"Then, real-estate values plunged, credit dried up, and demand for rentals softened. By the time 95 Oak Ave. was advertised for auction, they had lost all of their rental properties, except for one other. And that one, too, was headed for foreclosure."

"Back in September 2004, Oertel and Prunty paid $233,000 to buy 95 Oak Ave., according to real-estate records. At the time they bought the rental house, property values all over Rhode Island were soaring."

"Oertel and his partner borrowed $186,400, according to city property records. The 30-year mortgage carried an initial interest rate of 6.53 percent, which was scheduled to adjust two years later to a maximum of 9.53 percent. Thereafter, the rate would adjust every six months, to a maximum of 12.53 percent."

"'When the boom was going, we thought it was good to make an investment,' said Oertel. 'I consider myself a smart person. You listen. You never think it’s going to go down.'"

"Nor did he consider the hassles of rental property management. Some tenants paid their rent late; others did not pay at all. Evicting a tenant for nonpayment took up to six months. That was six months with no rental income to pay the mortgage."

"'The first tenants [on Oak Avenue] rented from September through April and left owing two months’ rent,' Oertel said. 'Then we got two guys in there, cousins, both working good jobs. They left owing about five months’ rent. Then I had some wonderful tenants — a husband and wife and baby — and they left.'"

"Meanwhile, the mortgage payments on 95 Oak Ave. began to climb. By last year, the payments had increased to about $2,300 a month, $1,000 a month more than the rent. His investment was losing money."

"'When you’re a personal investor,' Oertel said, 'it’s almost like a pool of investments in your portfolio, and when one place starts to tumble they all start to tumble.'"

"So, Oertel stopped paying the mortgage on 95 Oak Ave. 'It was a business decision. I couldn’t afford it anymore. I was gonna lose it anyway,' he said. 'I think the last payment I made was in February.'"

"In June, Oertel agreed to rent the house to Maria Simmons and her family for $1,300 a month. By then, he was already three months’ behind on the mortgage. But he said nothing to his new tenants."

"A lawyer who represents a loan servicer for Deutsche Bank wrote a letter to their landlord stating that the property at 95 Oak Ave. was 'to be sold at a foreclosure sale' on a date to be determined. The letter stated that the first auction notice would run in The Providence Journal on Aug. 2."

"Maria Simmons did not see the legal notice on Aug. 2. If she had, she said, she would not have written Oertel a $2,480 check on the same day for August and September’s rent. (He let her deduct $120 for paint and the cost of removing an old refrigerator.)"

"Money was tight. Maria had reasoned that if they paid their rent through September, it would give them a measure of security. 'I didn’t want to fall behind,' she said, later."

"Oertel said he did nothing wrong. Seated in his SUV outside his duplex, cell phone in hand, he described himself as someone who was simply trying to preserve his investments in a market fraught with risk."

"Real estate, he said, is like the stock market. 'You buy 10 stocks and you buy 10 buildings,' he said. 'Then people have to sell to get out because they need the money.'"

"Oertel blamed his financial losses on mortgage brokers and lenders and unreliable tenants. Not the Simmons family, though. He said they paid their rent. Oertel used the Simmons rent money to try to keep his other properties out of foreclosure. Further, he said, the family paid no rent after September. He also returned their $1,300 security deposit."

"'I used the money to try to keep the round-robin going,' he said. 'You start robbing Peter to pay Paul.'"

"Oertel said that he is the one who lost money, not Ken and Maria Simmons. 'Nobody got hurt in this,' he said, 'right?'"