The News Journal reports from Delaware. "From the moment in March 2006 when Melissa and Greg Thomas moved into the $445,000 house they built on five acres in Clayton, they knew they could barely afford it. Because of various problems that arose during construction, the Thomases have been unable to make the full monthly mortgage payment of $4,203 'since Day One,' Melissa Thomas said. Initially, they figured the rising housing market would solve their problem. The home would increase in value in a year and they would refinance."

"But the bottom fell out of the market. When the Thomases investigated refinancing, they discovered they have a huge prepayment penalty provision in their mortgage, which would cost them thousands of dollars. If they refinance, the Thomases will owe more than the house is worth, said Melissa Thomas. As it is, they are racking up more debt every month because they make only the minimum payment."

"'You feel like you're in quicksand,' said Greg Thomas. 'We're going under slowly.'"

"In Delaware, among borrowers who went into the foreclosure process in the third quarter, 21 percent did not respond to calls and letters from their lender."

"'Something has caused them to suddenly not have the income necessary to pay their mortgage, and they don't address it. This is where the shuffle begins -- they pay the smaller bills,' said Nina Heck, director of counseling with Consumer Credit Counseling Service of Maryland and Delaware in Baltimore."

The Washington Post. "The Perrywood subdivision in Upper Marlboro has long been synonymous with the pride and promise of Prince George's County. Lately, though, this suburban idyll has been afflicted by the same economic forces that have plagued less prosperous communities."

"Two of eight homeowners on Bar Geese are in foreclosure, according to RealtyTrac. In the past two years, 49 owners in the 1,100-home subdivision have either received notices threatening foreclosure, gone through auction proceedings or had their homes repossessed. Fourteen of those actions occurred in the past four months."

"When Kimberly Mitchell first saw the townhouse on Whistling Duck Drive, she knew she had found her next home. Mitchell, a single mother, bought the house eight years ago for $200,000 and took out a fixed-rate mortgage with a 7 percent interest rate."

"Mitchell left her corporate job in 2002 and started a day-care center in her home. The day-care business and finances were fine, she said, until she decided to refinance her home in 2005 and tap its equity to consolidate bills. Her loan officer steered her to an 8 percent adjustable-rate mortgage, assuring her that she could refinance later and return to a fixed-rate interest loan."

"She quickly fell behind. She later learned that her property taxes of more than $3,000 a year were no longer a part of her mortgage payments. In October, her rate will increase to more than 10 percent."

"Now she is stuck. 'When you call a refinance company, they base it on your credit score,' Mitchell said, adding that her credit is not good. 'It's a no-win situation.'"

"Fighting back tears, Mitchell described the stress she has endured. She said she and her son have resorted to eating noodles and peanut butter and jelly sandwiches several times a week to save money."

"'I don't know the last time I got eight hours of straight sleep,' she said. 'I just feel robbed.'"

"Del. Aisha N. Braveboy, who represents Perrywood, said she understands how homeowners can get into mortgage trouble. 'These are people who have great incomes, but their houses are priced at a point where they can't afford them,' she said."

"Mitchell, who owes $260,000 on her mortgage, said she tried to refinance at a lower rate, but lenders said her credit was not good enough. So she put her house on the market. List price: $350,000."

"As the housing and credit markets continue to spiral downward, business casualties are rising rapidly in bankruptcy courts across the Washington region."

"The number of corporations that have filed for Chapter 11 protection to reorganize so far this year in Maryland, Eastern Virginia and the District has more than doubled, compared with the same time period last year, court records show."

"'I'm talking to people about liquidating like never before,' said Bethesda lawyer James A. Vidmar Jr., who is representing a second-generation Montgomery County developer who filed for Chapter 11 bankruptcy after his builder bailed out of a 1,000-lot Delaware project."

"'Selling real estate is not a good business to be in these days,' said Stephen Goldberg, a Baltimore area lawyer who is representing Sandy Spring Bank, which called in its $13.5 million loan to the developer."

"One case involves a D.C. couple that staked their retirement, investment accounts and home equity on their first development project: a townhouse community on the Eastern Shore that ground to a halt halfway to completion when the real estate market began to decline."

"Though their lender did not foreclose on them, court documents show the couple filed for bankruptcy after the bank moved to garnish their personal accounts, leaving them no way to complete the project or pay their debts."

"(At) last weekends's foreclosure auction at the Walter E. Washington Convention Center...auction 'assistants,' ostensibly there to help people bid, wore tuxedos, bow ties and black Air Jordans. Arms flailing and voices whooping, they whipped up the crowd much the same as the cowboys cracking whips stirred up excitement in Kansas City. The auctioneer prattled on like Porky Pig calling the Kentucky Derby."

"Given the bulging inventory of foreclosed properties that banks need to unload, an auction seems like an efficient, fair way to move the goods fast...But what I saw at the foreclosure auction left me skeptical about the availability of auction bargains. Sellers, the banks that own the foreclosures, seem to be unduly optimistic about the prices they can get for foreclosures, which are, after all, damaged goods."

"The weekend before, I took advantage of an open house to check out one of those homes, an attractive five-bedroom, four-bathroom brick Colonial in Bowie. The brochure said, without elaboration, that it was 'previously valued' at $780,000."

"It was impossible to try out the heat, plumbing or appliances because utilities had been shut off for the winter. There were large holes in one wall of the basement where a home theater had been removed. The house is in a pleasant neighborhood, where an ice-cream truck made its rounds in late afternoon."

"Maryland tax records show the home's full assessed value at $531,450, and that the developer had sold it in 2004 for $460,000. At last week's auction, bidding started at $289,000 and the gavel slammed down at $530,000. Add the 5 percent buyer's premium owed on all sales that day, and the buyer will owe $556,500."

"You be the judge of whether that's a great deal. In the same neighborhood, two other five-bedroom homes, which are not foreclosures, are listed for sale at $645,000 and $650,000."

"It's impossible to know how many of the hundreds of homes auctioned last weekend will go to closing. The banks that own the homes set undisclosed reserve prices for each property. Even after the slam of the gavel, no one knew if the reserve had been met. And lenders still had 14 days to reject any of the deals."

"With so many homes on the market now, buyers want a bargain on all foreclosures, especially those sold at auction. Lenders seem to be in denial, but they are not in a position to hold out for higher prices. They're reluctant deal-makers, whether it's on foreclosures or on short sales."

The Baltimore Sun from Maryland. "The best immunization against foreclosure used to be affluence. No more."

"The number of homeowners defaulting on their loans in the Baltimore metro area last year rose most quickly among the highest- income counties with the most expensive housing - Howard, Anne Arundel and Carroll. Maryland's income-rich Washington suburbs are feeling it even more keenly, a Sun analysis has found."

"A year earlier, foreclosure cases in those counties were well below the number in the Baltimore area."

"'The demographics have certainly changed,' said Anne Balcer Norton, director of foreclosure prevention at a nonprofit in Baltimore that has fielded calls for help from homeowners in toney areas such as Roland Park and Bethesda. 'Everyone's affected by this.'"

"In Montgomery, where the typical household income tops $87,000, mortgage foreclosure cases rose nearly 130 percent last year. That was the biggest jump in the state."

"'I realize I'm not the only one, but I didn't realize how many people are being confronted ... with this kind of situation,' said LuJuanda Dixon, who is working with counseling group HomeFree-USA to try to save the house in Bowie that she bought with her husband last year for $650,000. Before Danny Dixon lost his job in November, they were making $100,000 a year."

"BeBe Stokes, a real estate agent in Prince George's County, is getting a lot of calls from homeowners begging for help to sell before their lenders step in."

"She understands where they're coming from. She fell two months behind on her own mortgage recently, pressed by a steep cut in income because of the housing-market downturn and - when she sold investment properties to stay afloat - an unexpectedly high income tax hit."

"'It's like a snowball,' said Stokes, who bought her Upper Marlboro house for just over $1 million in 2006. It doesn't help, she said, that her lender changed her loan terms a week before she settled on her home, increasing her monthly payments by nearly $2,000."

"The share of buyers opting for 'piggyback loans,' to cover the full cost of a home with no down payment, tripled in Montgomery County between 2004 and 2006 to three out of every 10, according to a recent study . In Prince George's, four out of 10 buyers had piggyback loans in 2006 - nearly double the share in 2004."

"Emily Wade's lender foreclosed on her Northwest Baltimore house at the end of 2006. Wade had inherited the house debt-free when her mother died. She also inherited property maintenance troubles, she said, and taking out a small mortgage seemed the best solution."

"But on a monthly income of $840, the $284-a-month payments proved too much even before the adjustable-rate loan reset. When she applied in 2004, she was happy she qualified. Now, she wishes the lender would have raised red flags rather than pushing the loan through."

"'I took a chance on the American dream,' Wade said, 'and I lost.'"

"The mortgage mess hanging over the country offers many useful (if painful) lessons. First on the list: Don't borrow more than you can really afford to pay back. Closely related to that is Lesson #2: Don't blindly rely on industry professionals to tell you what that amount is. Get down and dirty with the math yourself."

"Ryan W. James, senior mortgage banker with First Horizon Home Loans, said lenders will in most cases allow a debt-to-income ratio of up to 50 percent. If you make $5,000 a month ($60,000 a year), your monthly debt can't top $2,500."

"'If you had a $400 car payment and a $200 student loan and a $60 minimum payment on your credit cards, we know your maximum mortgage payment is only going to be about $1,840,' James said."

"In the go-go housing boom days, it wasn't too hard to push beyond that 50 percent limit, James said. Good credit? Sure, go ahead. But he says it's much tougher now."

"Though credit availability has tightened a lot in the last year, with loan products disappearing everywhere you look and lenders requiring better credit scores, today's debt-to-income limits are still high by historical standards."

"The traditional rule of thumb was 36 percent, says Christopher Cruise, a mortgage trainer in Silver Spring and a board member of the National Association of Responsible Loan Officers."

"James says he does a budget analysis with clients that gets beyond the ratios to the nitty gritty. What's your take-home pay after taxes, retirement plan contributions and the like? How much are you spending a month in addition to debt payments. How much do you want to be able to save once everything, including your mortgage, is paid up each month?"

"Cruise says that Baltimore-Washington housing prices, even with recent declines, remain high enough that buyers may feel forced to choose between the house they want and the lifestyle they're used to. His advice: Look in less-expensive neighborhoods you might not have considered, cut back on your non-mortgage spending or keep renting while you whip your finances into shape."

"'Have some willpower, for God's sake,' Cruise said. 'Buying a home now and getting foreclosed on in a year or two is not ideal.'"