A report from the Washington Post. "In the casino of the housing market, Tom Walters is holding the wrong cards. He's a mortgage broker, so business has been slow, and on his own house, payments have risen to about $6,200 -- too much to handle. Instead of gambling on a sale, Walters and his wife decided to let others take a chance. So for just $50, people can buy a raffle ticket for his six-bedroom, 4 1/2 -bath, 6,000-square-foot home on a two-acre parcel just outside of Annapolis. Estimated value? One million clams."

"This is the 10th house raffle attempted this year, according to the Maryland secretary of state's office. But only one, in Hagerstown, has been successful so far. In the Walterses' raffle, the winner (to be picked Dec. 31) gets the home, free and clear. No closing costs. No mortgage payments. No broker fees. The Walterses get to walk away."

"'It's kind of bittersweet,' Walters said. 'We've put so much into this that it'll be tough moving, but at the same time you have to do what's right for the family.'"

"The Walters had big plans for the house when they bought it for $425,000 in 2006. It was in foreclosure. Tom Walters had grown up nearby, and he and his wife fell for the log cabin originally built in 1840. Sure, it needed a bit of work. No problem, they thought. By the time they were done, they'd sunk about $750,000 into renovations. That includes the $450,000 construction loan they took out."

"The Walterses found they couldn't pull any of the equity out and their payments had grown. 'That's when it became necessary to sell,' Walterses said. 'Rather than stick it on market and take our chances, we wanted to be proactive.'"

The Wall Street Journal. "Despite all the gloom, some people believe it isn't too early to pick up bargains. One key, they say, is a deep understanding of the local demand for rental housing."

"Dinesh and Rima Kumar, who live in Ashburn, Va., last month bought a town house in Sterling, Va., a suburb of Washington, D.C., for $154,000. The same home sold in June 2005 for $375,000 to a buyer who used subprime loans to finance 100% of the price. It went into foreclosure late last year. Mr. Kumar says he has found a renter at $1,500 a month. The Kumars, who paid cash for the home, calculate their monthly expenses -- including taxes, insurance, maintenance and fees -- at $491 a month."

"The couple made the plunge partly because Ms. Kumar, a real-estate agent, noticed that homes in the area priced at $250,000 or less were attracting multiple offers. Home sales in the northern Virginia suburbs of Washington totaled 3,360 in September, up 92% from a year earlier, according to the Northern Virginia Association of Realtors. The average price: about $333,000, down 32% from a year earlier."

"'This could be the bottom,' Mr. Kumar says, and even if it isn't, 'the down side on a $150,000 property is pretty low.'"

"Moreover, he has been burned in the past by stock-market investments and thinks rental income will far exceed the meager interest rates offered on bank deposits."

The New York Times. "An exiting army of Republican foot soldiers is faced with the prospect of selling its Washington-area homes in the worst housing bust since the Great Depression. Many Republican-appointed officials in Washington are nested in northern Virginia. And for those who arrived near the height of the housing bubble, particularly those who came after George W. Bush was re-elected in 2004, what a time to buy in northern Virginia it was.'

"Like Miami and Las Vegas, northern Virginia was frantically built up during the housing bubble. Prices of single-family homes and condos skyrocketed. When I first lived in the area a couple of years ago, I remember hearing the curious term 'Fairfaxed.' It referred to Fairfax County, Va., an overbuilt Washington suburb. Builders continued to plant residential high-rises around the county and beyond in anticipation that housing prices would climb ever higher."

"Fast-forward to today. Also like Miami and Las Vegas, northern Virginia’s housing market has cratered. The average housing price in the greater northern Virginia area in September declined 32.11 percent from the previous year, according to the Northern Virginia Association of Realtors."

The Virginian Pilot. "The number of foreclosure-related notices in Hampton Roads was 1,155 in October, up 25 percent from September and 191 percent from year-ago levels, according to RealtyTrac. The spikes were most dramatic in Hampton, Portsmouth and Suffolk, all of which had an increase in foreclosure activity of more than 400 percent."

"'I think we're just looking at the tip of the iceberg,' said James Koch, an economist and president emeritus at Old Dominion University. 'If housing prices continue to deteriorate, and I expect they will, we're likely to see the foreclosure rate go up substantially.'"

"He predicts that homeowners in increasing numbers will walk away from homes for which they owe more than the property's value. The new foreclosure data are being released two days after the federal government announced a plan to help more homeowners avoid foreclosure. But the program may be a little too late, said Kevin Harris, a housing counselor and lending consultant for Community Housing Partners in Virginia Beach."

"'A lot of people are upside down. It's pretty bad,' Harris said. 'We get a lot of people calling due to loss of income, possibly having been laid off from a job. I definitely think it's a reflection of the economy.'"

"Things got harder and harder in the past year for small-business owner Beverly Turner. Fewer customers came in each month. Revenue kept falling. She fell behind on her rent. She decided to close the corporate office of Weight Loss Forever, as well as two of the seven stores throughout Virginia Beach and Chesapeake. She thought that would be enough to keep her business afloat."

"Then two weeks ago she got a letter from her creditor informing her that, as of Nov. 30, it no longer would finance her customers’ weight-loss plans, she said."

"Tidewater Sports & Collecti bles shut down its locations in Chesapeake and Newport News in August and September, respectively. Its store at Norfolk’s MacArthur Center is scheduled to close today , said Raelee Everett, the chief operating officer. She and her husband started the business in 1999, selling sports and novelty beanies at a flea market in Virginia Beach. Business had been pretty good until the economy turned, she said."

"The company filed for Chapter 11 bankruptcy reorganization last month. The store’s sales totaled $1.6 million in 2007, according to the tax return included with its bankruptcy filing. But the business still lost $19,673 last year. 'We grew too fast, took on too much debt and didn’t pay attention to the trends in the economy,' Everett said. 'Part of it was poor business management, part of it was the poor economy."

"The hardest part is letting down her employees, which totaled 27 in July, she said. By the end of December, she plans to close the last store in Virginia Beach. 'It’s a very bitter end,' Everett said."

The Times Dispatch from Virginia. "The U.S. economy is not likely to recover until the housing market stabilizes, according to experts from the Federal Reserve Bank of Richmond. The supply of houses for sale across the nation is too high. Prices nationwide and in Virginia are falling. And the quality of mortgages -- even those for people considered good credit risks -- has declined."

"Housing prices in Virginia began to fall in March and depreciation accelerated through June, the latest figures available, said Michael L. Riddle, a senior financial analyst at the Federal Reserve Bank of Richmond. 'Negative housing prices have been driven by Northern Virginia, areas along the coast and Richmond to a lesser extent,' Riddle said."

"'"It all boils down to a deterioration in underwriting,' said Riddle...referring to loose credit standards for funding mortgage loans that led to the housing bubble."

"Troubling new trends are emerging that show the number of borrowers with prime mortgages -- traditionally considered among the most stable loans -- is rising in Virginia and the nation. 'We're starting to see a notable deterioration in bedrock prime-rate loans,' Riddle said."

The Free Lance Star from Virginia. "There were 1,067 homes sold in the Fredericksburg area during the third quarter, a 15.7 percent jump from the year-ago period. Median sales prices dropped 19.5 percent; they were $230,000 in September for the Fredericksburg area--which comprises the city and Spotsylvania, Stafford, King George and Caroline counties."

"The trend of rising sales and falling prices has been most extreme in Prince William County, which has been hit hard by home foreclosures. Third-quarter sales there rose 144.6 percent from the same period in 2007, while median sales prices dropped 42.4 percent."

"Realtors on the call yesterday said the trend should continue in the fourth quarter and predicted that a leveling off of foreclosures and continued declines in new-home construction should stabilize the market. Christine Todd, CEO of the Northern Virginia Association of Realtors, called 2008 'the year of the cleanup,' as investors and bargain-seekers sweep foreclosures off the market."

The News & Advance from Virginia. "You wouldn’t expect a $1 million home on Easy Street on Smith Mountain Lake to end up in the same situation as a $20,000 house from inner-city Lynchburg. One was built as a lakeside mini-mansion in 2006. It has 5,200 square feet, granite countertops, cathedral ceilings and geothermal heat. The other was built in 1892 with a wood frame and siding. Its 1,500 square feet are warmed with electric baseboard heaters."

"Both met the same fate this year. Foreclosure. So did more than 200 other homes in the Lynchburg area. An examination by The News & Advance of land records in Lynchburg and the counties of Amherst, Appomattox, Bedford and Campbell show that more people have lost their homes this year than last year, up 33 percent overall."

"Many of the mortgages that went to foreclosure this year in the Lynchburg area bore the signs of subprime borrowing. The average interest rate, when listed in land records, was 7.9 percent. Nearly 10 percent of the foreclosed properties had interest rates that started at 10 percent or higher. At least 68 of the properties had mortgages financed with adjustable-rate loans. The top lenders whose local loans ended in foreclosure were big players in the subprime industry: Decision One Mortgage Company, New Century Mortgage and Option One Mortgage Company."

"Subprime lending was mortgage companies’ bread and butter for a while. But it became their downfall, said Billy Woolridge, a local mortgage originator who worked for American Home for six months before the company went bankrupt last year."

"'It wasn’t because of any wrongdoing. We weren’t doing anything that dozens of other companies were not doing,' he said."

"Clark Jefferson, (a) counselor for Lynchburg Community Action Group (said) their clients had missed mortgage payments for a variety of reasons. Jefferson said some had lost jobs. Some had taken on extra debt for cars or furniture."

"Melissa Yuille, senior housing counselor for the nonprofit agency, said she has seen some clients’ payments go from $800 to $1,200 a month after the interest rate changed. 'And who has an extra $400 lying around?' Jefferson said."

"'I’ve had a surprising amount in the upper-price ranges around (Smith Mountain) lake and the Forest area, some of the nicer homes,' said Bonnie Hall, a Roanoke-based real estate agent who deals only with foreclosures."

"One of those was the home on Easy Street in Moneta. With a backyard facing Smith Mountain Lake, the home was appraised by the county at $1.2 million. Cameron Jordan, the real estate agent who now owns that house, said the former owner was the contractor who built the home, then refinanced it in 2006."

"After the owners defaulted, a foreclosure auction was held in April. M&T Bank took the house. The home went on the market on July 4. Jordan immediately made an offer, and bought the house for $765,000."

"'I bought it with the hope that I can get my own house sold and move into it,' Jordan said. That has not happened yet. His second child was born this summer, and Jordan and his wife Angie were looking for a home with more bedrooms. The idea of living in a house that someone else lost doesn’t bother Jordan. He said that the default and foreclosure happened months before he got involved."

"Also, getting a foreclosure off the market could help other homes to sell by decreasing competition, he said. For now, though, he thinks his children will enjoy growing up in this home. 'I know that, number one, it’s a real good deal and it’s a really nice house,' Jordan said. 'I’m looking forward to living there. It’s nice enough that we’d be happy living in it forever.'"