The Housing Bubble

The Union Tribune reports from California. “Bank of America CEO Kenneth D. Lewis yesterday called on the lending industry to avoid foreclosure whenever possible ‘to help borrowers manage through the current crisis.’ Now it’s time for the lending industry to ‘return to a more disciplined view of risk standards that will protect everyone from a repetition of what we are going through today,’ Lewis said.”

“Lewis said he understood that San Diego area residents have suffered during the housing slump.”

“‘As a city that has experienced some of the most rapid declines in housing prices over the past 10 years, homeowners and neighborhoods are feeling the impact of this downturn more than most,’ he said.”

“‘If borrowers can afford to pay market rates and want to stay in their homes we can and do work with them to make that happen, even when it means modifying the terms of a loan they can no longer afford,’ Lewis said during his presentation. ‘Fortunately, this covers the majority of financially distressed borrowers.’”

“Real estate experts say that suspicious deals helped inflate property values during the boom and that the foreclosures are fueling a faster fall in values in today’s market.”

“One example occurred in Mission Hills. In October 2005, a roughly 1,400-square-foot home was listed for $1 million. It didn’t sell. In early April 2006, it was relisted for $989,000. A month later, the price was raised to $1.3 million.”

“It went into escrow for $1.25 million two days after the price increase. The buyer purchased it with zero-down financing, according to deed records. The lender foreclosed on the home in October. The bank resold it in April. The price: $640,000.”

“‘As an appraiser, I’m asked if properties in Mission Hills have decreased 50 percent in value like this one,’ said Todd Lackner, a real estate appraiser in San Diego. ‘My answer is no. This property was never worth $1.25 million. Many people just assume these foreclosures are part of the subprime meltdown. This is not true. These properties were purchased with the intention of being foreclosed on.’”

“‘Looking back to 2004 when we got into it, it was seen as a pretty small problem’ by the mortgage industry, said Frank McKenna, chief fraud strategist with BasePoint. ‘But at $6 billion a year, you’re looking at something that’s three times the size of credit card fraud.’”

The Press Telegram. “Officials said many homes bought in the past are not assessed anywhere near their market value, which has plunged recently. That means total assessments keep rising, even though some homes are dropping in value.”

“‘In a rising market, because of the 2percent increase cap included in Prop. 13, assessed values do not keep pace with market values,’ said Los Angeles County Assessor Rick Auerbach. ‘On the other hand, in a market such as we now have, the cap keeps us from experiencing a dramatic decrease in assessed value.’”

“Jack Kyser, chief economist for the Los Angeles County Economic Development Corp, said he believes most of the sales activity involves home foreclosures.”

“‘What you are seeing could be called the ‘dead cat bounce,’ Kyser said. ‘What we are seeing is unit sales are up, but prices are still declining and financial institutions are trying to get foreclosed properties off their books.’”

“Most of the new housing developments in the county in the past few years have been built in the Antelope Valley, where problems with subprime loans were more likely, Auerbach said. Amid the housing slowdown, Auerbach’s office recently reviewed 318,000 homes and condos and lowered assessments on 130,000 by an average of $73,000 each.”

The San Gabriel Valley Tribune. “At its peak, IndyMac employed about 3,000 people in the Pasadena area , according to the Pasadena Chamber of Commerce and previous statements from bank executives. The Pasadena staff will be slashed to about 500.”

“The company would like to raise money by selling the bank’s loans but has been unable to get anything close to its asking prices, according to Michael W. Perry, the bank’s CEO. The only way to stay afloat, he said, is to lay off workers and quit funding most home loans.”

“The layoffs will affect Pasadena’s economy, said Paul Little, CEO of the Pasadena Chamber of Commerce.”

“‘The subprime crisis has hit some of our employers pretty hard,’ he said, referring to Countrywide Financial, which also laid off employees from Pasadena offices. ‘That is going to have an impact on the businesses that support them nearby. People who sold them everything from paper clips to lunch would be somewhat concerned.’”

“‘With even less lenders out there, it will make life more miserable for the consumer for a while,’ said Jay Cervenka of Pasadena-based Cervenka & Lukes Mortgage Brokers. ‘It will make it even more difficult to get financing.’”

The Desert Sun. “Fred Bell, executive director of the California Building Industry Association’s Desert Chapter, said construction spending has come to a ’screeching halt.’”

“Single-family home permit activity is off 90 percent year-over-year from 2007 to 2008, he said. The lion’s share of jobs tied to construction is ‘nonexistent’ at this point. That’s significant because one-third of the jobs here are linked to construction activity.”

“‘Land values have declined by about 50 percent, and we’ve also seen a 20 to 25 percent drop in sales price,’ Bell said. ‘People are looking at the numbers on land value and they’re asking, ‘How far is it going to drop?’ It’s pushed a lot of people to the fence.’”

“‘I think we have yet to see the full impact,’ he added. ‘It’s still flowing down.’”

“‘We know prices are coming down in general across the board,’ said Greg Berkemer of the California Desert Association of Realtors.”

“‘The majority of the sales volume at this point is foreclosures,” said Ray Smith, public information officer for Riverside County. ‘They’re selling lower than they had been assessed.’”

The Bakersfield Californian. “Defaulted residential projects continue to pile up in Wasco, the rose-growing town of about 24,300, located 25 miles northwest of Bakersfield. Wasco Village LLC, a 380-unit development planned for the southeast corner of Highway 46 and Magnolia Avenue, defaulted on a $3.2 million loan July 3, county records show.”

“The filing brings Wasco’s tally of defaulted and foreclosed sites to at least nine. All were projects of out-of-town developers.”

“Buyers are in limbo while the bank that repossessed the property figures out what to do, said the spokeswoman for the auction house. When asked what the bank planned to do with the property, a spokeswoman for Indymac Bank, Katie McFadzean, said in an e-mail: ‘Indymac’s company policy states that it cannot comment on specific properties or transactions.’”

The Merced Sun Star. “The fallout from a slumped housing market provoked sharp debate at the Merced City Council’s Monday night meeting, as the council wrestled with whether to give a developer more time to build a bike path and other improvements at a stalled subdivision.”

“The council eventually voted unanimously to send the matter back to staff and consider it again at an August meeting.”

“Resident Tom Grave said he opposed postponing the path because developers in other parts of Merced have been given similar extensions — a pattern that he said hurts citizens. People bought houses in both Moraga and Bellevue Ranch because they thought amenities such as bike paths would soon appear, said Grave.”

“Lakemont’s VP of Land Development Brian Kesler said Lakemont hasn’t sold a house at the Moraga subdivision in eight months, and he doesn’t foresee selling another house for at least a year or 18 months. Kesler said he’s trying ‘desperately hard’ not to shutter the struggling subdivision, put a fence around it and let it become a pile of weeds.”

“‘We’re not trying to get away from building the path, but the machine that drives the building of these improvements is selling houses, and we’re not selling any,’ said Kesler.”

From News 10.net. “The stories of one foreclosure, or a street full of foreclosures have been told. This foreclosure involves nearly an entire development. It’s happening at Oakwood Shores in Manteca. Although a few homes are occupied, nearby models and empty lots are in the foreclosure process.”

“Oakwood Shores is a project by Beck Properties of Stockton. A company spokesman didn’t return calls to News 10. Two other Beck projects in Lathrop are also in foreclosure but the Manteca development is more noticeable because of its location just south of Highway 120.”

“‘This was our dream house. We thought this was our last move. We like the neighborhood. It’s quiet,’ said Ria Cesante, one of the few residents.”

“But she never counted on this kind of quiet. Hundreds of empty lots are covered with weeds. Only a few models and a cul-de-sac have been constructed. The clubhouse is well-decorated but locked up. The pool in back contains a few inches of dark brown water. Miles of shoreline sit empty.”

“Manteca realtor Steve Roland isn’t critical of the decision to build the neighborhood. ‘The timing was terrible, critical. They built a great product. Five years ago it would have been wonderful property to buy,’ he said.”

The Morgan Hill Times. “An initiative to reduce affordable housing from 33 to 20 percent of new homes in Morgan Hill, which residents will vote on in November, would lower the number of home-buying options for the middle and lower classes.”

“The initiative would consider a $725,000 home as affordable to moderate-income earners. The Morgan Hill City Council voted unanimously to place the measure, brought forth by a group of developers and real estate agents, on the November ballot and to write the argument against it.”

“‘(Below market rate units) are not a purchase,’ Santa Clara County Association of Realtors member Shanna Boigon said, referring to liens and stipulations on below market rate homes required by the city. ‘We, Realtors, call that sort of glorified renting. Some of the income (levels I’m seeing), I’m thinking, wait a minute - I could put that person in their own home.’”

The Fresno Bee. “Workers displaced from the real estate industry are finding new jobs in all kinds of places. For Kelly Fitzpatrick, it was in the big-hair business.”

“The former mortgage broker invented a plastic insert designed to give women’s hair volume usually achieved by teasing. She dubbed her business Big Happie Hair and has a patent pending.”

“Fitzpatrick said she sat on the idea for years. She got out of hairdressing and eventually opened a mortgage business called The Loan Broker, which at one point employed 20 people. But business dropped off when house sales dropped and prices plummeted.”

“Fitzpatrick used her savings to start Big Happie Hair about four months ago. She has sold 5,000 of her inserts to the Home Shopping Network and another 2,200 to the Australian home shopping channel.”

“‘We’re not in the black yet, but we’re doing awesome,’ Fitzpatrick said.”

The Marin Independent Journal. “Though his primary job is selling homes, Mill Valley Realtor Peter Richmond saw the mounting foreclosure crisis as a call to help people keep their homes as well.”

“Richmond, who spent 25 years in the lending industry before moving into real estate, documented his wealth of knowledge in his recent book, ‘Save Your House from Foreclosure!’”

“Richmond, who previously wrote ‘The Unofficial Guide to Flipping Properties,’ said banks are open to altering mortgage and loan terms, but it’s not easy to find the right bank official who can help.”

“‘You’ve got to keep banging and banging on the banks; just be persistent until you break down that wall,’ he said.”

“Marin’s foreclosure rate has doubled in the past year, and property defaults continue to grow. Statistics from ForeclosureRadar indicated 705 properties were in various stages of foreclosure within the past 120 days, compared with 676 distressed homes one week earlier. Nearly half of the properties - 334 - were in Novato, with San Rafael accounting for another 200.”

“Richmond said though roughly three of every eight marketed homes in Novato are either short sales or REOs, the crisis touches all corners of the county and includes homes of all prices.”

“Asked how Novato became Marin’s ground zero for foreclosures, Smith said his town likely appealed to first-time buyers who took advantage of loans ‘that aren’t available anymore.’”

“‘If you wanted to live in Marin, Novato is one of the first cities or neighborhoods you would consider because housing prices were more affordable there than anywhere else,’ he said.”

Some housing bubble news from Wall Street and Washington. Bloomberg, “Contracts to buy previously owned U.S. homes declined more than forecast in May, a sign prices that have been sliding for more than two years have yet to touch bottom. The index of pending home resales fell 4.7 percent, the National Association of Realtors said today. One in every 483 U.S. households either lost a home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said.”

“That was the highest rate since the company began reporting in January 2005 and the 29th consecutive month of year-over-year increases.”

“‘It’s definitely a different kind of market,’ said Devin Reiss, owner of Realty 500 Reiss Corp. in Las Vegas. ‘We used to sell homes in a day. Now, 50 percent of our sales are foreclosures.’”

“The PHSI, a forward-looking indicator based on contracts signed in May, remains 14.0 percent below May 2007.”

“Lawrence Yun, NAR chief economist, said some pullback after a sharp increase in the previous month was expected. ‘The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy,’ he said.”

“Shares of Marshall & Ilsley Corp., Wisconsin’s largest bank, fell Monday after the bank said it had an unexpected second-quarter loss as housing developers failed to repay their debts. The lender set aside $900 million to cover bad loans in the quarter as mortgages made in once-booming warm-weather states soured.”

The Whittier Daily News. “IndyMac Bancorp Inc. will lay off more than half of its employees and will no longer offer fixed-rate home mortgages, Michael W. Perry, the bank’s CEO said in a prepared statement.”

“Perry also announced that the Federal Deposit Insurance Corp. has downgraded IndyMac’s lending status from ‘well-capitalized,’ which means the bank can no longer accept brokered cash deposits without a waiver by the FDIC.”

“‘IndyMac was one of the banks that was using relatively weak underwriting standards on the basis that housing prices would continue to rise in value,’ said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, in an interview. ‘With prices coming down, that became the bottom card in the house of cards built by these lenders.’”

“Barclays Plc, the U.K.’s fourth-biggest bank, will stop selling new loans at its U.K. subprime loans unit and shed about 300 jobs because customer demand is drying up.”

“‘In the past year we have tried a whole range of activities to develop our business but the market demand simply isn’t strong enough,’ FirstPlus Managing Director Neil Radley, said in the statement.”

The Telegraph. “Abbey, Britain’s third largest lender, has said it has increased the amount it requires borrowers to put down as a deposit on an interest-only loan without a proven repayment vehicle is 50 per cent, while it requires a 25 per cent deposit where a proven repayment vehicle is in place.”

“Meanwhile, two high street lenders have tightened their general lending criteria to reflect the rising cost of living. Alliance & Leicester will assume a higher cost of living on its affordability calculator than in the past and there are also changes to working out how much the mortgage is going to cost.”

“In addition, Nationwide is changing the maximum age limit by which time the mortgage must be paid off to 75. Prior to this there was no upper age limit as long as borrowers could afford the mortgage payments from their pension income.”

“Rival lenders are expected to copy Abbey’s decision. Ray Boulger, of mortgage brokers John Charcol, said: ‘When one of the major lenders makes some changes, it is not unusual for others to follow.’”

The Daily Mail. “Re-mortgaging has collapsed as homeowners are put off by huge fees and expensive rates, experts said. The latest figures from the Council of Mortgage Lenders reveal a ’steep decline’ in the number of people switching lenders.”

“Figures show just 71,000 people re-mortgaged in May, a fall of 23 per cent compared to the same month last year. It is a dramatic U-turn from the booming re-mortgaging market of just a year ago when £500million was handed out in loans every day.”

“Chancellor, Vince Cable said: ‘The continuing fall in house prices comes as no surprise, but will bring more pain to homeowners. Since the start of the decade, house prices have soared out of control, unchecked by the Government and fuelled by irresponsible lending. With living costs spiralling and borrowing becoming ever more unaffordable, a housing market crash is inevitable.’”

The Guardian. “Auctions across the country reveal the same picture with auctioneers and vendors deadlocked. The former are telling the latter that if they want to sell their houses, they have to lower their prices significantly, but sellers can’t afford to do it. Conversely buyers can afford to wait before taking the plunge, knowing that prices are more likely to fall this year than go up.”

“‘Let’s start at 50, anyone for 50?’ asks the auctioneer. The packed room remains silent until one angry man runs breathlessly through the crowd and stops the proceedings in their tracks. ‘No,’ he shouts. ‘I told you I can’t take less than 55.”

“Charles Smailes, auctioneer at Feather Smailes & Scales in Harrogate, said: ‘Demand has dropped to nothing. It’s like the property market has fallen off a cliff.’”

“At their auction last week, 10 lots were offered but seven were withdrawn owing to lack of bids. Out of the 16 properties up for sale at the Southend auction, only nine were sold. Out of those nine, six were sold below their asking price.”

“Trouble in Singapore’s property market is brewing in the premium segment, which requires yield-seeking financial investors to support lofty valuations. After surging 72 percent in the two years through 2007, the price of freehold apartments in the prime districts fell about 5 percent in the second quarter of 2008, according to a property-consulting company.”

“Luxury condominiums, many of which were being marketed last year as ‘iconic,’ are looking vulnerable. Take Goodwood Residence, located at the edge of the financial district. Guocoland Ltd.’s plan to sell a big chunk of this upscale apartment complex to a fund managed by Kuwait Finance House KSC’s Malaysian unit has flopped.”

“According to a July 2 report in the Straits Times newspaper, Kuwait’s largest Islamic bank is buying only 36 units in the project, instead of the 97 it planned to purchase in December. The investor is now paying S$2,800 per square foot, or about 13 percent less than the price it agreed on in December.”

“‘Developers are cautious about releasing too many units,” Chua Yang Liang, head of Southeast Asia research at Jones Lang LaSalle Inc., wrote. ‘Buyers on the other hand aren’t willing to participate aggressively as they are anticipating prices to moderate.’”

Oxford Business News. “Official figures show that year-on-year sales in May were down 36%. Residential sales were hit particularly hard - dropping from KD138.1m ($521.5m) in May 2007 to KD50m ($188.9m) in May this year.”

“The Kuwaiti government introduced new regulations in the first half of this year in an effort to curb inflation. Perhaps most significantly, loans to the real estate sector became harder to obtain. This has had the effect of radically curbing liquidity available to potential borrowers, and demand has contracted accordingly.”

“Sales in residential property have been in decline since the market peak last July. National Bank of Kuwait (NBK) figures published in April showed average house prices to have tumbled 60% between that peak and February 2008. Next month’s year-on-year figures are likely to be even more severe.”

From Business Daily. “The surge in property prices in Nairobi suburban area may soon start claiming casualties as consumers feel the pinch from falling rental yields.”

“With some consumers already being forced to dig deeper into their pockets to meet monthly mortgage payments to supplement what rental incomes don’t cover, this could force the level of mortgage loan defaults to rise.”

“The Kenyan banking system is estimated to have given out house loans worth Sh20 billion.”

“Even as the economy has slowed down, property prices have been rising far much faster than tenants are willing to absorb in rent. This has created a situation where increases in the inventory of vacant apartments - as new property developments are completed - have met with tepid demand from consumers, forcing landlords to either reduce rent or maintain it low to remain competitive in a difficult market.”

“‘The number of people seeking advice on what to do or looking for alternative ways to service their mortgages is rising by the day,’ said Mr Justus Munene of Daytons Valuers, a property firm, and vice chairman of the Institution of Surveyors of Kenya (ISK).”

“‘The heat is boiling under and if the trend continues and the current economic conditions do not change, it is only a matter of time before massive mortgage defaults begin,’ said Mr Munene.”

“The most recent data shows that property prices in the middle-income segment have nearly doubled in the past six months.”

“Three bedroom apartments in Nairobi’s Kilimani and Kileleshwa that sold at an average of Sh6.5 million in December are now priced at not less than Sh8 million, while in Mombasa, similar houses that sold at around Sh2 million are selling for not less Sh3.5 million.”

“Data from property valuers indicate that the average annual rent earned in the middle to the top end of the property market is way below the industry guidelines on property profitability.”

“In Kilimani and Kileleshwa areas, apartment complex after another - which years back were being bought even before the construction was complete - are now pasted with rental signs as opposed to sale, an indication that supply has outstripped demand.”

“‘High inflation means less disposable income for anybody in the middle-income and below, less savings hence less investment options as most people in that group are speculative investors, rarely long term,’ said Terry Ryan, professor of economics and a member of the monetary advisory committee of the CBK.”

“Mr Chris Chege, a senior relationship manager in charge of mortgages at Housing Finance, said the development could be a result of the way the Kenyan mortgage market is structured and the misinterpretation that rent income alone can service a mortgage loan.”

“‘Given the high loan to property value ratio in Kenya, rent alone is not likely service mortgage loans,’ said Mr Chege.”

“If the rentals are revised upwards, there will be fewer numbers of consumers able to rent such houses leading to low occupancy levels and low returns. The less bitter pill to swallow, it seems, is the revision of pricing downwards to encourage sales and to free up money tied up in the investments.”

“Either way, the property market bubble has been pricked for the middle upper income areas in Nairobi.”

The Boulder County Business Journal. “The share of expensive homes in foreclosure continues to rise in Boulder County. Homes with mortgages for half-a-million dollars or more accounted for 9 percent, or 52, of the 581 foreclosures filed in Boulder County through June of this year. That’s up from 4.1 percent for the same six months a year ago.”

“‘Like a lot of people, I just got behind on payments,’ said one owner of a local million-dollar-plus home in foreclosure. He agreed to speak anonymously to the Business Report.”

“Now there is too much inventory to compete with - even among high-end homes - driving prices down and making it difficult to sell and cover the original loan. In the above homeowner’s case, a majority of the homes in his small unincorporated Boulder County subdivision are for sale, he said.”

“The homeowner is still employed, but he had banked on a stronger real estate market. ‘A lot of people like us bought on an inclining market, and we put a lot of investment into the home assuming the value would rise,’ he said.”

The San Francsico Chronicle. “William Poole served as president of the Federal Reserve Bank in St. Louis from 1998 until March 31, when he reached the mandatory retirement age. He also served on the Fed’s open market committee, which sets interest rates.”

“Q: Should the Fed have done more to stop the housing bubble?”

“A: No, I don’t think so. We all understood that the house price increases could not continue. We did not think through the possibility of a significant price decline and large-scale defaults and foreclosures.”

“We understood there was abusive lending and practices that were stripping equity out of households. I don’t remember the issue ever being raised that it could lead to defaults.”

“Q: If the Fed had acted to protect consumers, might it have prevented the credit crisis?”

“A: Maybe. The people who should have known were the financial firms sinking huge amounts of money into this. The biggest problems were mortgage originators who were not federally regulated. At this period there was a continuous push by Congress to make mortgage credit more readily available to subprime borrowers. For the Fed to have acted would have been contrary to the intent of Congress.”

“Q: Isn’t the Fed supposed to be independent?”

“A: The Fed is independent up to a point. The financial community, the Fed, academics, didn’t see the problem brewing.”

The Press of Atlantic City reports from New Jersey. “When Matthew Altier became the new VP of administration and finance at Richard Stockton College in April, he got more than just an office. He also got temporary use of a house. As part of his contract, Altier is caretaker of the state-owned home on Shore Road in Linwood. Stockton’s salary, $180,000 per year, was on par with Altier’s salary at California State University.”

“Altier owned a home near Sacramento, and there was no telling how long it would take to sell it in a deflated housing market. If he moved right away, he would have to support two homes.”

“Altier’s housing arrangement runs through June. He said he may look for a home in Linwood - once his California house sells. ‘This isn’t a long-term situation,’ he said. ‘I’d like to invest in my own home again.’”

The News Journal from Delaware. “Don Grist was under no illusions when he and his wife put their four-bedroom Newark home on the market in December. He listed the house at $479,000. It took six months and several price cuts to find a buyer. If the sale closes on July 15, the Grists will sell their home for $440,000 — $5,000 less than they paid for it almost two years ago.”

‘He considers himself one of the lucky ones who found a buyer, even if he and his wife had to write two mortgage checks a month while waiting for the house to sell.”

“‘Fortunately for us, we’re in the position that we could afford to do that,’ said Grist. ‘I understand a lot of people aren’t. I could see how people would be losing their minds.’”

“Home sales fell by 30 percent statewide through the first five months of this year, with median prices also taking a hit in most areas. And everywhere, sales took longer.”

“Near Lewes, Susie Hudson is settling into a new career away from real estate. Just a couple of years ago, as buyers faced off in bidding wars for beach properties, Hudson was bringing in a six-figure income selling homes as a Realtor, she said.”

“In early 2005, she bought an antique market north of Lewes as an investment, with no intention of ever working there. But slowing sales all but forced Hudson from her job as a Realtor, so she opted to run the antique business as a full-time pursuit.”

“‘A lot of Realtors come in here and say ‘at least you have a job’,’ Hudson said.”

“Hudson called real estate agents, including herself, mere ‘order-takers’ through the real estate boom, as buyers lined up to buy homes, many of which were purchased as investments. ‘Now you have to be more creative,’ she said. ‘You have to bust your butt and you still may not get the sale. Because I don’t have anybody to support me, I had to move on.’”

“Sales are off about 50 percent for Lani Freshwater, an agent who has sold homes for three decades. ‘This is the longest period that we’ve ever been through in my 30 years where we went down and didn’t come back up,’ Freshwater said. ‘Houses were so inflated. Things just got out of hand. This was due to happen.’”

“‘It is a good thing,’ Ann Riley, president of Wilmington-based Gilpin Mortgage, said of the tighter standards. ‘Is it taking more people out of the market? Yes,’ she said. ‘[But] I don’t think our industry did people any good by putting them into more house than they could afford. Now people are in a world of hurt in default situations.’”

“Delaware reached another record in May with 446 foreclosure-related filings, up 87 percent from the same month last year.”

The Baltimore Sun from Maryland. “As foreclosure cases continue to mount unabated, Maryland nonprofit groups, elected officials and the courts are joining forces to urge attorneys to help residents in danger of losing their homes.”

“More than 70,000 Maryland homeowners were behind on their mortgages in the first three months of the year, including thousands who faced the imminent loss of their homes. That’s an increase of 70 percent from a year earlier, according to the Mortgage Bankers Association.”

“‘The need is obviously enormous,’ said Esther F. Lardent, president of the Pro Bono Institute. ‘The biggest issue we’re seeing with this is that many of the major financial institutions that have issued the mortgages are also the clients of many large law firms. Those firms have contacted us to say that they would love to be able to help on this, but under the ethics rules, they would be considered potentially in a conflict-of-interest situation.’”

The Charleston Gazette from West Virginia. “Woody and Kelli Hill and their three children live on Charleston’s West Side. They bought their home in 2001, paying $134,000 and putting about the same amount into upgrades. Now, they are trying to sell it for $275,000.”

“‘We have had one open house. And I think things have gone great,’ Woody Hill said. ‘I don’t think we are going to make a fortune on it, but at least get our investment on it.’”

“‘We live in our own little world,’ said Dean Dawson, president of the board of directors of the Kanawha Valley Board of Realtors. ‘Homeowners, when they ask me how the market is and I tell them it’s fine here … they have this stunned face.’”

“In Kanawha County, between the fourth quarter of 2007 and first quarter of 2008, the average sale price of a home dropped slightly, from $143,700 to $135,400. However, in the downtown Charleston market, the average price of a home rose nearly 27 percent over 2007, according to Realtor numbers.”

“In West Virginia overall, there have been some drops, particularly in the second home market in Greenbrier and Pocahontas counties, said Ray Joseph, director of the state board.”

“The once smoking-hot Eastern Panhandle market has also seen drops, as people are less willing to commute to metro Washington with $4-a-gallon gas, he said.”

“One of the key reasons that West Virginians aren’t feeling the major housing bust is because there was no boom to begin with, Joseph said. ‘They look at the national market and think we are a part of it. We aren’t,’ he said.”

“‘I think the most important thing is to do your homework, just kind of get a feel for the market. Find true comparables. Don’t try to win the housing lottery by listing a house way too high,’ he said. ‘And don’t be afraid.’”

The Times News from North Carolina. “The housing market in Henderson County continues to be dismal as home sales decline and new home construction slows to a crawl. Average sales prices dropped from $252,561 in 2007 to $229,248 so far this year, a decrease of $23,313.”

“For the past several years, the southern mountains in general and Henderson County in particular have been a hot market for out-of-state transplants, especially people from Florida seeking to escape high property taxes, heat and hurricanes.”

“But beginning in late summer of last year, the pace in Henderson County slowed as people trying to relocate to the mountains discovered they could not sell their existing homes. If people thought 2007 was a bad year, 2008 has proven to be worse, economic analysts and area Realtors said.”

“‘It’s harder to find a mortgage today than it was a year ago, and lending institutions are going to be looking at loans with a much harder lens today than they were three years ago when the housing market was booming,’ said Adam York, an economic analyst with Wachovia Corporation. ‘The nation as a whole peaked with construction prices and building in general in 2005. That was kind of the end of the boom. Your area (Henderson County) was a little later in slowing down.’”

“‘Nationally there is an oversupply problem and I think one of the things that is hurting markets across the country at this point, is that people who are in those bad markets are unable to leave,’ York said. ‘They are unable to move to Hendersonville because they are not able to sell their homes. And add to that a weak economic environment in general and consumers at this point are loath to put big money on the table.’”

“Hendersonville Board of Realtors President Ron Stephens said he agrees that the 30 percent decrease in housing sales in Henderson County is ’significant,’ but he says the drop can be attributed more to a cooling in the higher priced, upscale housing market.”

“‘The reason that’s happening is the high end of the market, homes (priced) over $600,000 are really slow,’ Stephens said.”

“The housing crisis also extends to new residential construction with a 67 percent decrease from 2007 to 2008.”

“‘Both new housing starts with our permit center and subdivision applications are down significantly from this time last year,’ said Henderson County Planning Director Anthony Starr, ‘As far as subdivision lots we’ve approved each year for the last three or four years, those have been significantly higher than new homes. So there’s been more lots available than homes being built and that was true even when the housing market was hot.’”

“‘Either the number of subdivisions was going to have to slow down or the number of housing units being constructed was going to have to increase, but they’ve both slowed down,’ Starr said. ‘I’ve heard some builders are going to a four-day week and it’s not because of gas costs.’”

The Dispatch from North Carolina. “In Davidson County, the local housing slump is hurting an already declining economy. Foreclosures have increased 552 percent since 1998, according to Brian Shipwash, clerk of Davidson County Superior Court.”

“The biggest surges in the number of foreclosures can be seen between the years of 2000 and 2001 and 2007 and 2008. From 2000 to 2001, as local furniture plants began closing and moving production overseas, foreclosures jumped from 276 to 472.”

“From 2007 to 2008 - in which the amount is an estimate - the number of foreclosed homes will likely hike up from 811 to 972. This year, Davidson County is averaging 81 foreclosures per month, Shipwash said.”

“During a public counseling session this week on foreclosures…the only couple in attendance acknowledged that scams are out there.”

“‘We brought this house back in the family,’ said James Rolph, homeowner. Rolph bought the house belonging to his wife’s side of the family when it fell into foreclosure. Now, the house is in jeopardy again.”

“The Rolphs were able to hold their heads above water last month with the help of the national tax rebate check and unemployment. However, as the next month draws nearer, so does the chance of foreclosure.”

“‘I’ve been out of work for five weeks - I’m in the furniture business,’” said Rolph. ‘This started like six months ago; no orders have been coming in.’”

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