The Tribune Review reports from Pennsylvania. "During the first three months of 2008, 1,187 houses were foreclosed in the five-county Pittsburgh region, the second highest total for a three-month period on record, according to RealStats. Another report found that during the 23 months between January 2006 and November 2007, 9,046 homes had foreclosure proceedings in Allegheny County. Carl Grasha in Monroeville, has been specializing in the sale of foreclosed properties since 1971. He finds that 80 percent to 90 percent of the houses he sell have debris and rubbish left in them."

"Often, the problem stems from the lack of funds the former owners had to maintain the properties. 'I had to remove nine dumpsters full of trash out of one house recently, just to get it into safe and clean condition,' he said."

The News Post from Maryland. "Auctioneers saw it coming. They knew the subprime loan frenzy would cause many homeowners to mortgage their futures. 'In 2005, we found that some homebuyers were not well informed, yet they had no trouble getting no-documentation loans,' said Paul Cooper, VP at Alex Cooper Auctioneers, based in Towson."

"'You scratched your head,' he said. 'It didn't make sense. When the trouble came, it wasn't a real shock.'"

"David Prinsky, an attorney for (a) Washington-based law firm, said that in early 2006 he figured trouble was on its way. 'Everybody knew that the anniversary dates for graduated interest rate loans would come due in 2008, and that a lot of people would be caught in that,' he said...referring to 2/28 subprime loans, with deals of two years at a fixed interest rate and 28 years at a higher variable rate."

"Once the variable rates hit, many borrowers can't afford their mortgage payments. 'Bank of America saw it three years ago when it announced that it was no longer offering creative financing,' Prinsky said."

"'For investors to buy distressed properties as a profession, yes, they can make a lot of money. But one or two bad decisions can cost them,' Prinsky said. 'For that reason, these investors tend to be very conservative, and property values are now headed in one direction -- and it's not up.'"

"The foreclosure problem is having an impact on the Frederick community. Appraiser Wayne Six says foreclosures negatively affect the local real estate market in two ways: increasing the volume of inventory, and foreclosed-on homes selling below market value that tend to pull down the market."

"'Newer tract subdivisions where homes are three years old or less are typically the worst case scenario. This is because our local market peaked in June 2005,' Six said. Some homeowners with those newer homes are finding themselves what Six calls 'upside down.'"

"In 2006, 455 foreclosures were filed in Frederick County Circuit Court. In 2007, that number more than doubled to 1,025. This year, as of April 18, the foreclosure count stood at 485, and experts say there's worse to come."

"Foreclosures this year include $219,000 townhouses in Hillcrest Orchards and $650,000 single-family homes on quarter-acre lots in the Villages of Urbana. And the problem is affecting people across the economic spectrum, from construction workers to white-collar employees."

"Frederick County hasn't quite hit bottom yet, said appraiser Wayne Six. Typically, Frederick County has a balanced housing market when about 1,100 to 1,200 homes are for sale. As of April 21, 2,023 homes were available, he said."

"Inventory has grown since mid-January, when it was 1,850 homes. The county is seeing 40 to 45 sales a week, compared to 20 to 30 a year ago, but 60 or so homes are still coming on the market each week, Six said."

"'It's like we have a fish on (the hook), and he's still taking the line out a little bit, but he's not smoking the reel like he had been,' Six said."

"Generally, areas taking the hardest hits now are the ones where home prices rose the most, said Andy Bauer, a regional economist for the Federal Reserve Bank of Richmond. In the Mid-Atlantic region, Prince George's County and Virginia's Prince William County are having the biggest problems."

"Prices are adjusting, but housing inventory throughout the Washington-Baltimore region is going to need to fall farther before being cleared out, he said."

The Washington Post. "After self-proclaimed handyman Kevin Garvey had browsed more than 30 houses in Northern Virginia, the price and location of the single-family house off Liberia Lane made the first-time home buyer move to Manassas."

"'There were a lot more options in Manassas than in other areas,' said the 24-year-old, who looked in Leesburg, Centreville, Ashburn and Alexandria before buying the $305,000 house. 'This was a bank-owned property at a good price. It was an offer I couldn't pass up.'"

"Garvey is one of many first-time home buyers making their way to the area, real estate agents said. After a plague of foreclosures, Prince William County, Manassas and Manassas Park finally have some positive activity in the housing industry."

"'I'm happy to say we are seeing a lot of first-time home buyers,' said Carolyn Capalbo, a real estate agent in Manassas. 'People are seeing the prices come down to a point where it makes sense to purchase. What they would be paying in rent versus a mortgage is about equal, so there is a strong argument to buy.'"

"Because of the number of foreclosures in Prince William, Manassas and Manassas Park -- 659 in March -- a lot more affordable houses are on the market, real estate agents said."

"Although Garvey, who moved from Tallahassee, said he didn't expect to buy a house at age 24, the prices here vs. in Florida made it a better option. 'What I found interesting here with the foreclosures was I could get a better deal than what I could have gotten in Florida' for the same size home, Garvey said."

"'Real estate agents said the Prince William market is heating up more quickly than others because it took a bigger hit."

"The housing market is looking much more affordable in Prince William than in other places,' said Stephen Fuller, an economist at George Mason University. 'Prices got way too far away from reality across the region. Prince William is adjusting more substantially and will be a much better housing market in the long run because there is a better balance between value and price.'"

"The MRIS data show the average recent sale price of a Manassas house is $195,500, 40 percent lower than last year. In Prince William, it's $299,600 -- a 26 percent drop. The average cost of a house in Fairfax and Loudoun is still more than $400,000."

"'As a small-time investor, you can't go wrong, especially now,' said Lou Coletta, who just invested in his second Prince William property. 'Prince William was hit the hardest, and prices have taken a tremendous drop.'"

"Keith M. Elliott Jr., with Re/Max Olympic Realty in Haymarket, said that though houses are cheap, buyers need to be cautious because foreclosed properties come as-is. 'The state of some of these homes was disgusting,' said first-time home buyer Sue Lozano, who looked in the Prince William area before settling on a house in Chantilly. 'People just didn't care what state they left them in.'"

The Free Lance Star from Virginia. "The residential rental market in the Fredericksburg area has stayed strong as housing sales and prices have slumped, local Realtors say. Linda O'Sullivan, an agent who does both rentals and sales, said rental prices have stayed steady or even gone up in the past couple of years, a time in which median sales prices in the Fredericksburg area have dropped nearly 25 percent from peak to trough."

"She said demand is mostly coming from people who were thinking about buying a home, but who have decided to wait out the recent economic downturn."

"Realtors say foreclosures have played a role also in the demand for rental property. A Thursday search of RealtyTrac turned up more than 1,000 foreclosures each in Stafford and Spotsylvania counties. 'All those people going into foreclosure have to live somewhere,' said Cathy Butler, property manager in Spotsylvania."

"O'Sullivan said the Fredericksburg area has traditionally had a strong rental market. The developers of Cobblestone Square in Fredericksburg are banking on that strength as they transform the community off Lafayette Boulevard from condominiums to apartments."

"Chris Waller, who is VP of Cobblestone partner Garrett Development Corp., said apartment developers have shown interest in the undeveloped portion of the community. Eighty-four condos have already been built at Cobblestone, and about 60 have been sold. Waller and other Cobblestone developers are looking for a buyer who will build 292 apartment units at the site."

"Waller said if they built all those units as condos, it might take years to sell them, leading to fire-sale prices. But he said the apartments should prove popular."

"'The market won't allow anything else right now,' Waller said."

The Citizen Times from North Carolina. "Western North Carolina hasn’t been hit as hard as most places by the wave of home mortgage foreclosures sweeping the country, but more families are losing their homes, and the problem appears to be worsening. The number of foreclosures in WNC for the first three months of the year was still up 20.3 percent over the first quarter of 2007."

"'There are some time bombs out there,' said Victor Moore, a financial adviser for (a) consumer credit counseling agency serving WNC. 'It looks like (the increase in foreclosures) will go beyond a one-year event.'"

"'The lenders really set it up' in some cases so that adjustable rate mortgages, or ARMs, were hard for borrowers to resist, said mortgage broker Kent Wolff. 'If you had someone with extremely damaged credit … they’d say, 'Well, congratulations, you’re approved. Your rate on (an ARM) is 8.5. Your rate on a 30-year fixed (mortgage) is 11 percent.'"

"Wolff said...it is 'absolutely, positively correct (that) there were a large number of less scrupulous brokers' just looking to make a quick buck on a loan."

"The causes of the problem locally and nationally are similar: Lenders lent too much, borrowers borrowed too much, and when what had been a spectacular upward climb in home values finally faltered, or a borrower suffered a financial reversal, both sides were left exposed."

"'People got used to — on both sides of the ledger — thinking that home prices are always going to go up,' said Mark Pearce, North Carolina’s deputy commissioner of banks."