The Baltimore Sun reports from Maryland. “The National Association of Realtors’ chief economist told local real estate agents yesterday that he believes the Baltimore housing market has hit bottom and 2008 should be a better year, assuming buyers don’t sit on the sidelines, anticipating major price drops. ‘This area will be very interesting to watch because there’s very solid economic growth, but people aren’t buying homes,’ said Lawrence Yun.”

“He added: ‘Ten years from now, people will look back at 2008 and say, ‘Wow, that was a great time to become a homeowner.’”

“Yun said ‘excessive negative coverage’ about the nation as a whole, which saw prices fall, has given buyers a distorted picture.”

“But other economists aren’t so optimistic. Anirban Basu, CEO of a Baltimore economic and policy consulting firm, said that he’s sticking to the forecast he gave the Home Builders Association of Maryland: No bottom until next year.”

“‘This year I expect to be the year of the falling prices,’ Basu said.”

“The Greater Baltimore Board of Realtors, which brought Yun in to speak to a packed hotel conference room, said yesterday that it will team up with other local Realtor groups in the metro area on a $50,000 media campaign with that ‘great-time-to-buy’ message.”

“‘What we want to do is negate all the national media in terms of the doom and gloom,’ said Cathy Werner, president of the Greater Baltimore Board of Realtors and an agent for 22 years.”

“Denie Dulin, an agent in Baltimore, hopes buyers will stop waiting for that doom and gloom to show up in prices. Right now, they keep delaying a purchase because they think prices and interest rates will drop, she said.”

“‘They’re looking and looking and looking and want to see 50 or 60 homes before they make their decision,’ Dulin said. ‘That’s a lot of looking.’”

“Gov. Martin O’Malley announced a wide-ranging plan yesterday to confront an unprecedented rise in home foreclosures and combat predatory mortgage schemes.”

“Tens of thousands of subprime mortgages are expected to go into foreclosure in Maryland over the next two years at a cost of $2.7 billion in lost property value and $19 million in property taxes, according to the Joint Economic Committee in Congress.”

“About one-fifth of homeowners with subprime mortgages in the state were late on their payments or in the foreclosure process during the three months through October, according to the Mortgage Bankers Association.”

“‘These are really, really tough times,’ O’Malley said. ‘We are seeing a national economic downturn, and we are also seeing a real unprecedented crisis when it comes to foreclosures.’”

“The administration also announced yesterday the ‘Bridge to HOPE’ program to provide interest-free loans of up to $15,000 so that homeowners can catch up on their mortgage payments and avoid foreclosure. The HOPE loan program, announced last summer by O’Malley, didn’t meet expectations. It would have directed $100 million to assist hundreds of homeowners refinance, but only 14 homeowners have qualified.”

“Thomas E. Perez, Maryland’s secretary of labor, licensing and regulation, has frequently said that it’s harder to get licensed as a barber than as a mortgage broker in Maryland, and one regulatory change would increase the amount of experience needed to obtain a license.”

“‘You can be assured that person is qualified to give you a loan,’ Perez said. ‘That person would be required to look after the public interest rather than just lining his own pockets.’”

The Maryland Daily Record. “Sarah Bloom Raskin, Maryland commissioner of financial regulation, said she thinks the reforms will be appropriate, but not too restrictive. ‘We are not expecting any credit availability problems to emerge whatsoever,’ she said.”

“David Pulford Jr., president of the Maryland Mortgage Bankers Association, said a proposed regulation to establish a duty of good faith and fair dealing for lenders, brokers, servicers and borrowers sounds good in theory but uniform definitions of those terms could be problematic.”

“‘If the legislature is going to require us to show a net tangible benefit that is according to legislation, then I have a real hard time with that,’ said Pulford.”

“Kathleen Murphy, CEO of the Maryland Bankers Association, said she does not think the state regulations would prove onerous to the point where they would restrict the availability of credit in the state.”

“She said the secondary market for subprime loans, which are often packaged by the companies that originate them and resold as investment products, is drying up.”

“‘In essence,’ she said, ‘those loans aren’t going to be made because those outlets aren’t available.’”

The New York Times on Maryland. “At Vixxen Hair Salon, the main topic of conversation has always been money. But since last August, Anjanette Booker, the owner, has noticed a new focus. ‘Now it’s money and foreclosures,’ Miss Booker said.”

“For each of the last four years, more than half of the foreclosures in the Belair-Edison neighborhood have been homes owned primarily by women, according to a nonprofit community development organization.”

“Single women have been among the fastest-growing groups of homeowners in recent years, and in Baltimore they accounted for 40 percent of home sales in 2006, twice the national average, according to the National Association of Realtors. Nearly half of these mortgages were subprime.”

“‘When I bought my house, it was the American Dream,’ said Kue McIntyr, a single mother of three who is scrambling to avoid losing her row house, on which she defaulted after losing her job. ‘Now I need to save it for my boys.’”

“In Belair-Edison, these trends converge at Vixxen Hair Salon, where on a recent afternoon the chairs were empty, as they have often been since summer, when many adjustable-rate mortgages in the neighborhood reset — and many women began cutting back on beauty care to pay for them.”

“‘Just our conversations, our demeanor, have changed,’ said Miss Booker, who, like most of her customers, is a single woman trying to save her home from foreclosure. ‘Now when we have the TV on, and something comes on about interest rates, we’ll be screaming at the TV.’”

“Four years ago, Miss Booker bought a brick row house for $130,000, taking a subprime mortgage because she had a low credit score. Her initial payments were $841 a month.”

“‘He said the rate was adjustable but in six months you can refinance,’ she said. ‘But I never did. I didn’t ask why I didn’t get a fixed rate from the beginning.’”

“After two years, her mortgage payments shot up to $1,769. She has borrowed money from her former husband and two friends, but says it is hard to ask for money ‘because most people are going through what you’re going through.’”

“From her house she said she could see five homes with ‘For Sale’ signs out front, signs that went up around the time many mortgages reset. ‘It looks like a ghost town,’ she said of the streets around her house.”

“The neighborhood’s 6,400 houses are mostly owner-occupied, and median house prices have nearly doubled since 2004, to $125,000.”

“Ms. McIntyre, bought her house for $125,000 in April 2006, using two subprime loans, adjustable loans that started at 8.35 percent and 13.25 percent, the lender insisted that she use her savings to pay down a car loan, a common demand on subprime loans. After she lost her job, she had no reserve to pay her mortgage.”

“‘I feel they had me from the start,’ Ms. McIntyre said. ‘I was eligible for money as a first-time home buyer and a state employee. Nobody told me about any of these.’”

“Her house was offered at foreclosure auction in December, without a buyer. She is still living in it, hoping to work out a payment plan with her lender.”

“‘And if I can’t keep my house, I need to save my money so I’ll be ready to buy another house in two years,’ she said. ‘But it’s really hard to get out of this hole.’”

The Washington Post. “Home buyers and sellers in the Washington area face a new challenge: Most of the region has been tagged a ‘declining market’ by the powerful loan underwriters who review mortgage applications.”

“That means appraisals are receiving an extra dose of scrutiny, and lenders are asking some buyers to come up with more down-payment cash. Such a broad-brush treatment of the diverse Washington market risks weakening prices in neighborhoods that, so far at least, have been holding their own.”

“In November, a ‘declining market’ flag was enough to scuttle a $510,000 home purchase planned by Tony and Sarah Pierson, both Army captains. They were only days away from closing on a brick Cape Cod near the historic district in Leesburg.”

“But the deal fell apart when their lender, USAA First Mortgage Origination, notified them that, because of that flag, USAA would no longer honor its preapproval commitment for a package of first and second mortgages covering 100 percent of the price.”

“Even though the appraisal showed a value higher than the Piersons had agreed to pay for the home, USAA told them it would approve the deal only if the couple came up with a 5 percent down payment.”

“‘Five percent of half a million dollars is $25,000,’ Tony noted. They had that in savings, but had been planning to use it to renovate the house. They didn’t close the mortgage.”

“According to a Fannie Mae policy statement released last month, its declining market flag calls for a lender to more closely examine whether the home’s appraisal accurately reflects current market conditions. If a giant such as Fannie says values are headed down, what other mortgage investor is going to be so bold as to dismiss the warning?”

“‘It’s not just Fannie Mae, it’s every investor,’ said David Stevens, president of affiliated businesses, including mortgage lending, at Long & Foster Real Estate. As a result, according to Stevens, a loan that used to require 5 percent down now requires 10 percent, and one that required 10 percent now calls for 15. ‘It’s stopping sales,’ he said.”

“The Piersons continue to hunt for a home, with their renovation budget now converted into a down payment budget. I asked Tony if that declining-market notice gave him pause about investing in a home.”

“‘No, because you need a place to live,’ he said. ‘We’re going to be here at least five years. We’re not under the mistaken assumption that we’re going to get rich. When you’re renting, you’re losing $20,000 a year in rent plus whatever tax breaks you miss. You don’t know what’s going to happen in the future.’”

“He also summed up how the fear of real estate losses just may bring about such losses. ‘They’re not loaning the money after they’ve made a written agreement to do so because of what they feel might happen in the future. They created the problem [through lax lending] but their solution is making it worse.’”

The Lebanon Daily News from Pennsylvania. “Lebanon County Realtors say the county’s real-estate market has slowed but is still healthy.”

“‘It’s not booming like it was for two years, but we’ve eased back to a normal market,’ said Melissa MacBride, who is secretary of the Lebanon County Association of Realtors. ‘We’re not seeing homes fly off the market in two or three days, but that’s not typical.’”

“‘We hit those glory years, and you can’t stay there forever,’ said Irene Pickett, president of the county association.”

“Average Lebanon County sales prices have increased every year since 2002, when the mean figure was $115,464. In fact, since 1990, prices have risen every year except 1997 and 2001.”

“‘It’s not all gloom and doom, as depicted in the national media,’ MacBride said.” “‘It really isn’t that bad,’ Pickett said. ‘It has tightened up for people with poor credit.’”

“Pickett said she has seen the lending industry evolve. ‘When I first got into real estate, people had to have 10 percent down unless you were working with FHA (Federal Housing Administration loan programs),’ Pickett said.”

The Evening Sun from Pennsylvania. “Higher gas prices could be to blame for a slight drop in home values throughout the southern region of York County last year, officials are saying.”

“‘I think the higher gas prices have slowed the migration from Maryland to York County a bit,’ said Steve Snell, executive officer of the Realtors Association of York and Adams Counties.”

“The fact that homes in the southern region of the county have historically been the most sought-after might have contributed to the price drop. ‘Those school districts were the hottest in the county and may have cooled the quickest,’ Snell said.”

“Most real-estate experts agree that with more active listings on the market, a situation that often allows for added room to negotiate price, and mortgage rates staying at or below 6 percent, this continues to be a good time for people to buy a home.”

“In the first 11 months of 2007, York County boasted 3,142 active real-estate listings, compared with 2,524 in the prior year.”

“Despite added inventory, the number of homes sold within the first 11 months of 2007 dropped 8.9 percent to 4,953, compared with 5,436 in 2006.”

“Dominic Arcuri, associate broker with Morgan-Collins Realtors, said the drop in home sales has its roots in how the real-estate industry has been perceived by potential buyers.”

“‘Our industry is suffering through a perception problem,’ he said. ‘When you pick up the newspaper or turn on the TV, you hear how bad the market is.’”