A report from New Jersey Biz. "Homeowners in the state facing mortgage foreclosures are heading in droves to law firms, state agencies and nonprofits for advice on how to save their homes or buy time before they hand over their keys. Glenn Reiser, a partner in (a) law firm in Hackensack, says he is seeing 'a tremendous increase' in the number of distressed homeowners calling in for what his trade calls 'foreclosure mitigation services.'"

"Reiser says the firm has been getting three to five such inquiries a week since March, compared with one or two a week in January and February."

"Reiser says foreclosures are now hitting people across the income spectrum. 'Typically, the average person facing a foreclosure is one who has a hard-luck story or somebody who has lost a job, got sick or has had a divorce,' he says. 'But the type of client coming to us now is one I have never seen before-a two-income family earning in excess of $100,000 annually and with an extremely high mortgage debt service.'"

"Reiser says his current clients include a Bergen County couple with a combined annual income of more than $120,000, and two mortgages totaling $443,000 on a home with a current market value of $400,000. He says they are nine months behind on monthly payments of more than $3,900, and are trying to sell their home."

"Other attorneys have similar stories to tell. 'This crunch has hit a far broader spectrum of the population than ever before in my 39 years' as a lawyer, says James Aaron, a partner in (a) Ocean-based law firm."

The New York Times on New Jersey. "In a state where the major burden of paying for government services falls to the property tax, New Jersey bears the unenviable distinction of having the highest property taxes in the country. Over the last five years, the average state property tax has increased 30 percent."

"Since housing values have started to drop, some homeowners are balking that they are now paying too much - based on inflated property assessments made at the height of the real estate boom - and are now asking the assessor to come back for another look."

"From 2003 to 2007, the average assessed price of a home in New Jersey rose by 50 percent: to $256,450 in 2007, up from $173,110 in 2003, according to data from the State Department of Treasury."

"'Was it criminal?' asked Harold Frankel, speaking of the 2005 reassessment of Lakewood that resulted in a 60 percent increase in his property tax bill. 'No. But it was unfair. I think it was stupid to do a reassessment at a time when half of the market was driven by speculation.'"

"Scott Alexander was elected mayor of Haddon Heights last fall, running on a platform that largely focused on the incompetence of the reassessment effort in his Camden County town. With its 2006-7 reassessment, three-quarters of the town's 3,039 properties saw their assessed value go down, while one-quarter saw huge increases in their home's assessed values, and, concurrently, property tax bills that were more than double the previous year."

"'Everyone thought the whole town's values went up and therefore the tax rates were going to go down, but that wasn't the case,' Mr. Alexander said. 'The results were all over the place.'"

"Now several hundred homeowners in Haddon Heights, including Mr. Alexander, are appealing their reassessments. The mayor said his house, at $525,000, has lost 20 percent of its value since the reassessment was completed last year and the real estate market has continued to soften."

The Maryland Daily Record. "Along with many other small and midsize banks, Baltimore-based Provident Bankshares Corp. has suffered through the aftermath of the subprime mortgage crisis, because of a portfolio heavily weighted with housing-related loans. Provident shied away from offering subprime loans, but it has still felt the aftershocks of the mess."

"'Even though Provident didn't invest or lend into subprime, when that tree fell, it took down a lot of prime trees in the vicinity of it,' said Dennis Starlipper, chief financial officer of the bank. 'None of us had any idea of the magnitude of the collapse,' he said."

"The affects of a crumbling housing market made investors afraid of putting their money into a bank so tied to the industry, Starlipper said. Locally, shares of First Mariner Bancorp have fallen from a 52-week high of $14.20 to $3.85 Monday."

"'Investors in this sector have rotated out some time ago and are very leery of rotating back in until the environment of residential finance appears to stabilize,' Starlipper said."

"The turmoil in the housing market caused Provident to write down more than $90 million in mortgage-related securities in the 1st quarter."

"'If you look at their loan portfolio, they had a high amount of loans in the home equity and construction, and investors' concerns are that the capital they've raised to navigate them through the entire credit cycle will not be adequate,' said Damon DelMonte, an analyst who covers Provident."

"Starlipper said nothing would indicate that the bank would see major write-downs in the second quarter, but it's not out of the woods yet. 'In no way could I ever say the write-downs are over,' he said. 'It is possible that we may have further write-downs in the future.'"

"The chief judge of Maryland's highest court is calling on lawyers to lend a hand to people facing foreclosure. According to Court of Appeals Chief Judge Robert M. Bell, Maryland is one of the 10 states hardest hit by the foreclosure crisis, with 11,000 foreclosures anticipated for 2008."

"'Not every homeowner can save their home. Not every homeowner deserves to have their home saved,' Bell said. 'But, for those who do deserve to have their home saved ... that's what this profession is all about.'"

"Foreclosure 'is no longer a subprime problem nor is it strictly an urban problem,' Bell said; rather, it has 'spread to every corner of the state.'"

The Times Dispatch from Virginia. "Joan Peaslee, a top-selling agent at Prudential Slater James River, had never dealt with a short sale -- until this year. 'I didn't even know what one was,' said Peaslee, who has been selling real estate in the Richmond area for more than 20 years."

"Requests for short sales have doubled from a year ago, said Jason Spooner, senior VP of defaults for SunTrust Mortgage Inc. in Richmond. 'As a tool belt, short sales will be with us in 2008 and 2009,' Spooner said. 'I don't think it's a bad thing. At the end of the day, the last thing we want to do is foreclose.'"

"Todd Poole is trying to work out a short sale with his mortgage lender. He bought a big, beautiful Queen Anne Victorian in the Barton Heights neighborhood in North Richmond for $285,000 at the peak of the housing boom in April 2006."

"Poole, an attorney, moved to Atlanta for a job and put his house on the market in January for $324,950. When the house didn't sell, he lowered the price to $299,000. The house is on the market now for $224,950 -- $100,000 less than the original asking price -- and Poole still has no offers. His mortgage is for $285,000."

"That doesn't include the $30,000 he and his wife put into the house in new copper flashing and privacy fencing. 'We put everything we had into that house. It's our dream home. In a different neighborhood, it would be worth a lot more,' he said."

"Poole said he is trying to get approval for the short sale, but the process is tedious and involved. He said he will allow the house to go into foreclosure if the bank does not agree to the short sale and forgive the remaining debt."

"'I would like to work with the bank to reduce their loss and to reduce mine,' he said."

"His credit report will be harmed with a short sale but not as much as it would with a foreclosure, real estate experts say. Peaslee, the agent who relisted the house at the reduced price, said the short sale scared away one potential buyer."

"'The stars don't align with a short sale,' she said. 'We don't know what price the lender will take or how long it take to get an answer.'"

"A short sale can take as much as 90 days longer than a typical sale, said Lem Marshall, special counsel for the Virginia Association of Realtors. Even then, there is no guarantee it will go through."

"Short sales were not done in general during the housing-related recession in the early 1990s because the downturn was shorter and less severe, he said. Marshall has been conducting courses on short sales for agents across the state since August. 'There are so many out there,' he said."

"With so many houses on the market, why bother with the hassle of a short sale? 'Buyers get a deal,' Marshall said. Houses sold in a short sale can go for 60 percent to 75 percent of the value, he said."

"Lenders may forgive the debt and write it off as a loss. Or, they may require the seller to liquidate other assets to make up the balance of the loan. 'Some lenders forgive debt, some don't,' Marshall said."

"'If the seller is driving a new $40,000 car, he will need to sell it and get a clunker and give the lender the difference. But usually the seller has been picked clean at this point,' he said."

"Nationwide, prices have fallen 20 percent from a year ago and continue to drift down. Although the decline in the Richmond area has been modest, Northern Virginia has seen a steep drop in prices."

"'This market is unique; we haven't seen anything like it,' Marshall said."

The Virginia Pilot. "When Tom Edwards and Cyndi Culpepper put a house in Port Norfolk up for sale last summer, they thought it would easily bring $330,000. Edwards had bought the Victorian on Douglas Avenue in Portsmouth in rough shape for about $90,000 in 2004. He and his wife invested about $110,000 more to refurbish the place."

"The house didn't sell. In February, the couple hired a new real estate agent who convinced them to drop the price to $291,000. Culpepper said she was reluctant. The couple are like many Hampton Roads home sellers who have resisted lowering their prices as the local housing market slowed and values across the country dropped."

"As sellers here have held out on price, the inventory of available homes has piled up."

"The number of active listings across the region - including all Hampton Roads localities as well as outlying rural areas such as Western Tidewater, the Eastern Shore and northeastern North Carolina - climbed to 15,183 at the end of May, almost 11 percent higher than the same time last year, according to the regional MLS."

"Current listings are almost five times the number in May 2004, when the local market headed toward its peak, said Vinod Agarwal, an economics professor at Old Dominion University, whose data includes a slightly smaller regional slice."

"Listing prices for homes in Hampton Roads may be indicating more angst ahead for sellers. As of the end of May, the median price of active listings fell to $289,900, down more than 9 percent from $320,000 a year earlier."

"'In our thinking, resellers of homes will sooner or later realize that if they want to sell their homes, they're going to have to lower their prices,' Agarwal said."

"Juliette Brown, a real estate agent, recently listed a home in the Olde Towne neighborhood of Portsmouth for $450,000. The owners bought it for $360,000 in September 2005, city assessor's records show."

"They made many upgrades to the historic house and now, with a growing family, hope to earn enough to put down on a larger place, Brown said. Like other sellers, they cannot give too much on their asking price 'because of what they already owe the bank or because of what they need to buy their next house,' she said."

"No matter their financial needs, sellers must face the reality of today's market if they want to move their properties, agents said. Many look back at a neighbor's sale two or three years ago and want to cling to those prices."

"Brown said she bought her house in the Greenbrier area of Chesapeake in 1998 for $125,000. Four years ago, a neighbor's home sold for $375,000. A similar house nearby is listed now at $299,000, she said."

"'It's hard for them to understand, to fathom, that it's different from a couple of years ago,' Brown said. They think, she continued, 'My neighbor across the street made $100,000. I want to make $100,000 now.'"

"Keith Abernathy said prospective buyers in recent years couldn't find an available townhouse in the Sandie Point development in Portsmouth. He bought his condominium there in 1998 for about $150,000 and put it on the market in February 2006."

"Listed at $300,000, the three-bedroom condo's appeal suffered when the housing bubble began to contract. Abernathy took it off the market for about six months over the winter 2007 holidays."

"This spring, he relisted it at $279,000 and has since dropped it to $269,000. Now, Abernathy is offering other incentives: a home warranty, a year of paid condo fees and $5,000 in paid closing costs."

"'There comes a point where you don't want to lower the price and bring the values down for your neighbors,' Abernathy said, adding of Sandie Point: 'It's one of the best-kept secrets in Portsmouth.'"

"Back in Port Norfolk, Culpepper and Edwards recently told their agent that they would entertain offers as low as $250,000. The couple, who live across the street from their home on the market, has invested in a number of properties in Portsmouth."

"'We buy, we rehab, we sell - well, we try to sell,' Culpepper said. 'Lately, we haven't been very lucky with the selling part.'"