The Salem News reports from Massachusetts. "The first sign of trouble came in December at a lottery to select the owners of some of the new Palmer Cove Condominiums. There were 15 condos for sale, with three-bedrooms going for what appeared a bargain - $189,900. When this project was conceived, an overflow crowd of applicants was expected. Instead, there was just one."

"'We knew it was a challenging market, but we didn't think the market would be that weak," said Michael Whelan, executive director of the Salem Harbor Community Development Corp. 'One application was a shocker.'"

"Seven months later, a home-ownership project that held out so much hope for the city's low-income Point neighborhood, where more than 80 percent of residents are renters, teeters on the edge of foreclosure."

"The Salem Harbor CDC, a nonprofit agency, has asked the city for permission to abandon the condo project and switch to rentals. That's the only way out of this financial mess, according to Whelan."

"'The real estate market has collapsed out from under us,' Bill Quinn, the agency's attorney, told the city's zoning board."

"Whelan said it would be disingenuous to keep marketing this as condos and only misleading to the few buyers they might attract. 'I think we'd be acting in bad faith ...' he said. 'We have a condo project we know will not succeed.'"

The Boston Globe from Massachusetts. "A Boston-area couple who are in foreclosure, despite their herculean attempts to prevent it, have filed a lawsuit against Washington Mutual. The suit, filed one week ago, indicates the Pestanas would not have gone into foreclosure if they had reached someone at WaMu with authority to resolve their problem."

"After the couple missed their August 2007 payment, Mark Pestana, a human resources specialist, and Lori Pestana, a business consultant whose work had slowed, still felt they could get current on their loan. One option might have been dipping into retirement savings, they said."

"'I feel like we were just sucked in and caught in a vortex that we couldn't get out of,' Lori Pestana said about trying to prevent Washington Mutual from foreclosing on a $275,000, fixed-rate mortgage."

The Boston Herald from Massachusetts. "A California investment firm has agreed to modify 200 Massachusetts homeowners' subprime mortgages - slashing interest rates and forgiving thousands of dollars in late charges, legal fees and past-due interest."

"Attorney General Martha Coakley sued Fremont Investment & Loan, a lender notorious for aggressively pushing subprime mortgages during the housing boom, last year, winning an injunction that limited the firm's right to foreclose on its 2,200 Massachusetts customers."

"Fremont has since sold off 490 of its Bay State loans - 200 to WMD Capital Markets LLC and 290 to Carrington Mortgage Services."

"But foreclosure expert John Anderson said the pact does nothing to address the fact that many subprime borrowers are 'under water.' 'For many people, the best thing to do would be to take the $10,000 to $25,000 that WMD is offering and walk away,' he said."

The Providence Journal from Rhode Island. "At the end of June, vacant properties in Providence numbered slightly more than 950 - about 300 more than during the last real-estate bust, in the early 1990s recession, according to the city's director of planning and development, Thomas E. Deller."

"At last count, 422 of the city's properties were bank-owned, although the number keeps rising as more people walk away from properties that they are unable or unwilling to pay for."

"The sidewalk along Ware Court is broken and empty - like the houses. All but one, that is. The two-story cottage at the end of the block is home to the Lewis family. They bought the house in 2001. Now they are, literally, Ware Court's sole remaining residents. Their neighbors have all lost their homes to foreclosure."

"'When we bought it, every house on this street people lived in,' says Terri Lewis. Now, 'every house on the street is in foreclosure but mine.'"

"Lewis feels trapped. Her 13-year-old daughter is not allowed to go outside alone. If Terri Lewis' husband is working late at his job for a security company in Boston, she and her daughter stay locked inside."

"One day, Lewis was driving her husband to work and saw a man dart out of the house next door. Another time, she caught four men across the street cutting out the copper pipes. She called the police but the thieves took off."

"'The police don't come any more,' she said. 'They must think Mrs. Lewis is crazy because I'm forever calling them.'"

"Joy E. Riley, principal broker of Westcott Properties, a real-estate brokerage firm that has built a lucrative business selling bank-owned properties, had received a call earlier in the day from the city's department of inspection and standards that a reporter had noticed that the door to one of its properties was open."

"Asked if the properties had any prospective buyers, Riley replied, 'Yes, there's interest.'"

"Lewis piped up. 'You want to put that one on the market?' she said, pointing to her house."

The New York Post. "Foreclosures in the city were up 67 percent in July compared to the same month last year. The outer boroughs in particular felt the burn, with the number of auctioned-off homes in Queens surging 81 percent last month compared with July 2007. Staten Island registered a shocking 215 percent increase in the same period."

"Brooklyn reached a two-year high in foreclosure auctions, while The Bronx recorded a sizable 16 percent increase, according to Propertyshark. Manhattan didn't emerge unscathed. While only 7.6 percent more homes hit the block last month than in July 2007, there was an alarming 55 percent increase in foreclosure sales from June to July of this year."

"'The numbers are pretty dramatic for New York City,' said Propertyshark CEO Bill Saniford. 'In Queens, it's quite scary.'"

"Although foreclosures remain limited mainly to low-income areas, they're having a domino effect that has driving down prices citywide, said Saniford."

The Bridgeton News from New Jersey. "Housing foreclosures continue to pile up in Cumberland County. In the past 30 days alone, lenders have initiated new foreclosure proceedings against 51 county homeowners, according to representatives at Affordable Homes of Millville Ecumenical."

"In addition, more than 900 homeowners in the county, after falling three to four months behind on their mortgage payments, have faced pre-foreclosure since February of last year, the point when many say a burst housing bubble became a national crisis."

"'Oh, yes, there was a significant uptick in homes under sheriff's sales,' said Chirstine Platania, of the sheriff's department foreclosure department. 'First, there was a time when there wasn't really any increase when everyone was saying we should've had an increase. Then all of a sudden, in March 2008, it just spiked.'"

The Carroll County Times from Maryland. "Debbie Rhode listed her house in Westminster for sale in June 2007. After about five months of some interest but no movement, she gave in and found an agent to sell her house. More than six months after the agent had no luck, she took the house off the market in June."

"'It's very discouraging, and I don't think it's anything I'm doing wrong,' Rhode said. 'It's very stressful. I've lowered the price three times.'"

"Rhode, who already is living in another home, just hopes that eventually the market will pick up again. 'I've done everything I can think of to make the house marketable. This [takes] a toll on your emotions,' she said. 'Nobody is buying houses right now; it's almost like a celebration when you see a sold sign.'"

The Baltimore Sun from Maryland. "With his unconventional condo project in a former Locust Point grain elevator nearly done, developer Patrick Turner unveiled pricing for the 228 upscale units and said he expects as many as 60 buyers to close in the next month."

"As the housing market tanked, the head of Turner Development Group developed a strategy to forgo pre-sales and wait to set prices until he finished converting the former Archer Daniels Midland Co. plant into housing."

"The project, near the tip of the Locust Point peninsula, will be completed by mid-September, when the first home buyers should move in. 'We've said we're not going to set prices until we're almost done the building and price it according to where the market is,' he said. 'People aren't going to pay more than something is worth. The initial prices are below market.'"

The Virginia Pilot. "Two years ago, Gary Caruana built more than 40 homes in the region. This year, he says, he'll be lucky to get four or five built. 'It takes appointment after appointment after appointment to get them under contract,' said Caruana, head of Virginia Beach-based Caruana Homes Inc. and GTC Homes."

"'It's not a line of business that we're coveting in this environment,' said Ben Berry, CEO of Gateway Bank & Trust Co., whose parent company is based in Virginia Beach."

"Some builders say now that they overpaid for properties that developers made available. For example, Caruana said he bought 10 lots in the Great Bridge area of Chesapeake in late 2005 for $315,000 apiece despite misgivings about the cost. Several are still vacant, he said, and their values have plunged."

"William Brice, president of WATAB Construction Corp. in Norfolk, recalled having the same problem. Some developers, he said, required that builders buy a minimum number of lots, which required taking on additional debt."

"'They had us over a barrel, but you had to take it,' Brice said."

The Washington Post. "Jane Hwang spent $120,000 and devoted five years waiting for her perfect custom home. Then in one brief phone call, she learned she might lose it all. The builder, Seville Homes, couldn't pay its bills, and its bank was seizing Hwang's nearly completed house."

"Scared of losing her investment, Hwang pounced into action. She went to the auction on the Fairfax County courthouse steps and outbid a bank for the house. 'For five years I have been fixated on this place,' said Hwang, a real estate agent. 'I planned my retirement, I put all my life in there. I had to grab that house.'"

"Despite buying the Annandale home at a foreclosure auction for $700,000, Hwang said losing her deposit, as well as paying to complete construction and resolve lingering zoning concerns, means that the home will cost her more than $50,000 over the original $800,000 price."

"Hwang said she saw Stephen Korfonta, Seville's owner, nearby during the auction, but they did not speak. 'I was so angry,' she said."

"Seville Homes, a small Virginia builder, collected hundreds of thousands in deposits in recent years for homes in Northern Virginia that it never delivered. There are foreclosure filings on 19 Seville properties, including a Vienna house assessed at $1.2 million and an Annandale house assessed at $1 million. A $2.2 million five-bedroom home owned by Korfonta personally has also been in the foreclosure process."

"It is common for some small builders to use a buyer's deposit to help fund operations instead of putting it in escrow, said Kenneth Wenhold, director of the mid-Atlantic region for MetroStudy. 'There are a lot of builders having issues, especially smaller builders who are wrestling with cash flow and still trying to build houses.'"

"Some Seville customers whose homes have not been delivered are still hoping for their money back. Jeewon Kim heard the news about the foreclosure of her five-bedroom house in Annandale from a friend. Kim immediately called Korfonta, who she said agreed to return her $50,000 deposit. She did not receive the first payment, which was due in May."

"But another is due in September. 'We have to find a way to make him pay us the money back,' she said."

The Free Lance Star from Virginia. "Here is what a prospective buyer would encounter while touring one foreclosed home in Spotsylvania County: A tree lay on the roof and blocked the front entrance. It was unclear how long the tree, which apparently was hit by lightning, had been on the vacant home."

"There's mold in the refrigerator and water damage in the basement. It's difficult to take the smell for long. Realtors say that house, which is under contract, is in worse shape than most foreclosures. But inspectors say it's not uncommon to find significant damage, and many require thousands of dollars of repairs before they're move-in ready."

"'It's mind-boggling,' said Joel Webber, who has run the Stafford County-based Old Dominion Home Inspection Services since 1998. 'It's sad to see it.'"

"Webber said the vast majority of his inspections these days are on homes in foreclosure. Many area residents have lost the pricey homes purchased during the peak of the housing boom a couple of years ago."

"Webber questioned why the banks wouldn't take better care of the homes if they're trying to sell them. Suzy Stone, a Realtor in Spotsylvania, said some banks do fix up the homes. But she said most buyers of foreclosures know there will be some problems. Many of the buyers are investors. They buy them on the cheap, sink in some money for repairs and flip them."

"Stone said that frequently people take their appliances out of the home before they're forced to leave. They'll also often leave trash behind and neglect the lawn, as they no longer care about the home. Old food is sometimes left in refrigerators."

"'I opened the front door and couldn't go in, it was so bad,' Stone recalls of one foreclosure home she was showing."

"The new owners will frequently have to repaint the home and put in new carpeting and flooring, Stone said. But that's sometimes worth it considering how little some of the homes are selling for, Stone said. The aforementioned house in Spotsylvania was listed for less than $120,000, about a 50 percent discount from what it might have sold for a couple of years back."

"'It's a whole different market out there,' Webber said."