The Des Moines Register reports from Iowa. "Deb Baker believes she's one of about 31,600 Iowa homeowners whose mortgage is more than the home's value - a situation that could hinder her ability to refinance her unaffordable loan or to sell her home. 'You hate to lose what you put into your home,' said Baker, who's working with her lender to lower the payment on what she believes is a flawed mortgage. 'I'm going to do what I have to to make it work. Paying my mortgage is my first priority.'"

"Patrick Madigan, an Iowa assistant attorney general, said the state also experienced 'a fair number' of the inflated appraisals that accompanied the subprime-loan boom now causing foreclosures throughout the nation. 'Mortgage brokers and subprime lenders like Ameriquest would go to existing homeowners and pitch debt consolidation financing' with the promise of helping homeowners save money, Madigan said."

"'Unfortunately, many of the homes didn't have the value to support rolling all of that debt into the mortgage. So, these brokers would align themselves with unscrupulous appraisers' who would produce an inflated assessment, he said. 'People were told they were OK. ... But these appraisals weren't valid. It was a lie.'"

"'People were underwater from Day One - the day they signed the loan agreement,' said Madigan, who added that it's difficult to know how many borrowers received bad appraisals."

"When Baker lost her nursing job eight months later and found a new job that paid half as much, she investigated getting her monthly payment lowered. That's when she discovered she paid $21,000 more than Polk County has assessed the home, at $78,000. Baker said the appraiser used by her mortgage broker valued the house exactly at the amount she offered. The same was true of the loans her sister and friend received through the same broker, who is no longer in business."

"Baker is working...to see if she can get her current lender to modify her loan - lower the private mortgage insurance payment and reduce her interest rate and principal. If she's unsuccessful, Baker will try to refinance her mortgage next spring. She hopes improvements - a new garage, carpeting and drywall - will boost the home's value enough to support a new loan."

"Until then, Baker said she will forget about seeing first-run movies, buying new clothes and traveling to ensure her mortgage is paid. 'I'll just keep cutting back until I figure out something,' she said."

The Press Citizen from Iowa. "The controversial Lytham Condominiums project calls for 31 units to be built on a 9.5-acre site. Contractors have been doing demolition, excavation and grading since the second week of October. Construction is slated to begin in April or May 2009."

"Developer Jeff Hendrickson said he isn't concerned about the struggling housing market. He said there are already deposits down on four homes. 'The economy is always a concern, but I feel that this project is well-positioned in the market,' he said. 'Our customer will probably be diversified financially with a longer-term perspective.'"

"The condominiums will range from 2,665 to 3,675 square feet. Interiors of the units will feature two fireplaces, hardwood floors, high-end cabinetry, granite countertops and wet bars. Prices for the condominiums will range from $529,000 to $599,000."

The Kansas City Star on Missouri. "In a market brimming with houses for sale, several dozen stood out Saturday — big, yellow auction signs touting them as a potential bonanza for Kansas City area bargain hunters. Harry Falk, 28, a recent transplant from Sacramento, Calif., was among those kicking the tires of what is expected to be more than 75 foreclosed houses on the Missouri side of the metro and outlying counties that will be auctioned Monday evening."

"The house Falk was looking over is typical of those being offered. The three-bedroom house had been on the market since October, with no takers at the asking price of $159,000. The starting bid when it goes on auction Monday will be $9,000. That sounds like quite a deal, but it’s not something you want to leap into without doing your homework."

'''It’s a good floor plan, and the location is good,' Falk said. 'The question is, if you have to put $45,000 or $50,000 into the house, how much do you have to put up for a bid?'"

"Greg Fisher of Overland Park was another potential bidder for 5933 Rockhill. He was interested in flipping the property, buying it low, fixing it up and selling it for a good profit. He’s renovated and sold about a dozen houses over the past 10 years. 'An auction method is a little new to me, but I expect to bid,' he said. 'I have four houses I’m interested in.'"

"There will be at least five lenders on hand to do deals, said Rick Weinberg, a Real Estate Disposition Corp. spokesman. And be sure to bring your W-2 and tax return to prove you can afford the new house you just bid on. 'People need to prove they have the money to pay the mortgage,' Weinberg said. 'The last thing we want to do is put us back in a situation that got us foreclosed in the first place.'"

Reuters on Illinois. "Less than a year ago, few people in this affluent Chicago suburb expected the subprime U.S. housing crisis would hit close to home. 'We thought Hinsdale was virtually immune and we wouldn't see any foreclosures, but we have,' said Dave Hanna, president of the Chicago Association of Realtors. 'Nowhere is immune.'"

"Hinsdale has been popular among wealthy doctors, lawyers and executives. It has also seen a 37 percent jump in foreclosure filings this year, according to RealtyTrac, and local data shows the average home sale price has fallen to $1.07 million from $1.15 million in September 2007."

"The consequences of years of devil-may-care mortgage lending during the U.S. housing boom were first felt among America's poorer home owners. But if that is where it started, it did not stop there. 'People think this is just a lower-income problem,' said Mabel Guzmann, a realtor in Chicago. 'It's not.'"

"'According to First American CoreLogic, in August 2008, 5 percent of U.S. jumbo prime mortgages -- those over $417,000 -- were behind payments 60 days or more. That was higher than the 3 percent of normal prime mortgage loans 60 days or more behind, but well below the 29.5 percent delinquencies seen for subprime loans, or the 15.4 percent rate for Alt A mortgages, which are a step above subprime."

"But that 5 percent rate for jumbo delinquencies was more than three times the 1.4 percent rate in August 2007. 'Jumbo prime mortgages have seen the biggest increase in delinquencies of any category over the past year,' said Sam Khater, chief economist of First American CoreLogic."

"Hanna said he has seen an improvement in how Illinois banks handle short sales, as he feels the impact of the crisis has sunk in for more bankers. 'A few months ago, these bankers maybe saw the secretary down the hall lose her home, but they couldn't relate to that,' he said. 'Now, it's maybe the guy in the office next door. It has just become a lot more personal.'"

The Chicago Tribune from Illinois. "The home-building company who put Rolling Meadows on the map called it quits last week, giving up an attempt to emerge from bankruptcy. Kimball Hill Homes' demise isn't the tale of a home builder undone by simple greed or short-sightedness. It's the story of a company that saw itself as offering people a version of the American dream and tried to buffer itself against the real estate industry's inevitable cycles, but got swamped anyway."

"Closer to home, Lakewood Homes President Buz Hoffman, whose father built Hoffman Estates, recently returned three projects in Newark, Plainfield and Burlington to lenders rather than face foreclosures. In Hampshire, lenders have initiated foreclosure proceedings against part of a development by Pasquinelli Homes, another Chicago-area family-owned builder started in 1956 by two brothers."

"And Warrenville-based Neumann Homes, which got its start in the mid-1980s, sought bankruptcy protection a year ago and is in the process of liquidating."

"It wasn't until the firm had two decades under its belt that Hill looked beyond metropolitan Chicago, entering the Houston market in 1989. More expansion followed, and at one time the company was in 17 markets, nine states and five regions. By 2006, when Kimball Hill had more than 44,000 homes on its resume."

"'David had more energy than any builder I ever met,' said Hoffman. 'He had wonderful ambitions. He wanted to be very large, and there's a finite number of homes you can do in Chicago. He diversified beautifully. Had this thing only been a little blip, David and others would have been fine.'"

"Until last week, the company thought it had a chance, since an investor had emerged and signed a letter of intent to acquire the company. On Monday, that unnamed investor backed out of the deal, deciding that the housing markets, particularly in Texas, were a long way from recovery. As a result, Kimball Hill will liquidate, and the name will disappear from the local landscape after almost 40 years."

"'We were trying to prepare for that rainy day by deleveraging and increasing the amount of equity,' said Kimball Hill CEO Ken Love. 'We had a very formal program in place and we were making very good progress. But this downturn more than overtook us.'"

The Press & Guide from Michigan. "Several up-and-coming companies have expressed interest in setting up shop in Dearborn Heights, but city officials say the state's struggling economy could prevent them from doing so. 'The fact is we're experiencing a significant credit crunch right now,' said Dearborn Heights Mayor Dan Paletko. 'Banks aren't writing loans, which makes if very difficult for businesses to receive the financing they need.'"

"City officials say they're becoming equally frustrated with plans to redevelop the old fire station property located at the corner of George and Drexel. Two years ago, the Dearborn Heights City Council decided between two main proposals for the land: one from Mohamed Hakim, who wanted to build condos, and Moussa Allouch, who wanted to build single-family homes. The issue was put to a vote and the council accepted Hakim's bid."

"But in an interview with the Press & Guide earlier this year, Hakim said he's decided against condos in favor of building single-family homes. But he is not sure when it will happen, citing the state of Michigan's housing market. 'The market isn't supporting the construction of new homes right now,' Paletko said. 'It's very frustrating.'"

Minnesota Public Radio. "More than 20,000 in Minnesota have gone through foreclosure this year. When they go empty, they can attract thieves and vandals, but they also invite people who are simply looking for shelter. Problem is, some of those vacant houses are deemed unsafe to live in."

"One night a week, St. Paul city inspectors make surprise visits at problem buildings, looking for people who may be living there illegally. With the current foreclosure crisis, program manager Steve Magner says it's pretty easy for squatters to spot the abandoned homes. 'They see when someone moves out, or the papers are not being picked up, or the grass is not being cut, or the snow is not shoveled,' he says. 'A place might be going into foreclosure, but utilities are still on, so they will just go in there and set up camp.'"

"Many of the residents visited on the nighttime checks are renters. Magner says he's run into people who have unwittingly paid rent to swindlers who don't even own the vacant buildings. But officials say at least half of the people who are caught living in vacant buildings are the rightful owners of those homes. In many cases, they're in a bind because can't afford to do the rehab while paying rent to live somewhere else."

The Star Tribune from Minnesota. "The Washington County tax hearing had yet to begin, but Jesse Ventura, former governor and a Dellwood homeowner, had a few things to say to a couple of county board members Thursday night. As the officials stood before him, smiling and listening, the seated Ventura made reference to the value of his property, which still showed a rise this year for the purpose of determining 2009 taxes, and the former governor found the valuation a little hard to believe."

"'Am I living in a twilight zone?' he asked."

"What many people do not realize, however, is that the market values used to determine tax bills were set last January and sent to property owners in separate notices last March. This year, however, as the economy has worsened, more people have been left to question the accuracy of the values, as presented on November's tax notices."

"'Are you kidding me?' is the question that St. Paul City Council President Kathy Lantry said she's heard most often from constituents this year. 'In this market, my value is going up?'"