The Monitor reports from Texas. “The nationwide housing slump is finally catching up to the Rio Grande Valley. Local building permits this year hit the lowest level since 2001. An overbuilt market during the past five years, combined with an increasingly more conservative mortgage market, has sent Valley builders scrambling for customers, builders and industry insiders say.”

“‘There is a real dearth of housing starts and I think that is really associated with the more stringent requirements on lenders,’ said Brownsville developer Bill Hudson.”

“The number of home permits in the Valley dropped 33 percent during the first five months of 2007 compared to the same period last year, according to statistics released recently by the U.S. Census Bureau.”

“The decrease is across the Valley and few areas are immune to tighter conditions, builders say. Some builders have had to make drastic changes to their local business model. National builder DR Horton has stopped raising new developments in the area.”

“During the last several years, the Valley has been on a home building spree, said Mike Blum, a real estate broker in McAllen. Suddenly, families who couldn’t previously afford homes on the area’s low wages could afford new homes under creative loan practices.”

“Wall Street and government regulators are now forcing lenders to tighten the loan process after several subprime firms failed during the first quarter of this year and the number of foreclosures nationwide skyrocketed. ‘The subprime shakeup has had an effect on the market,’ said Jack Pollock, president of the Rio Grande Valley division for Casa Linda Homes.”

“One report in May said the McAllen area leads the nation in the number of subprime loans at nearly 27 percent, according to First American LoanPerformance.”

“The decrease in home building has hit all segments of the construction market, from landowners to lot developers. There is currently about a 40-month supply of developed lots in the area, much higher than a normal supply of less than 24 months.”

“Even cities are seeing the decrease and that could cost thousands for each municipality in fees for building permits. ‘It’s slower during the last few months,’ said Luis Vasquez, chief building official for the city of McAllen. ‘We have had a little breather after things have been so fast.’”

“Vasquez said the department added staff during the housing boom of the last five years to keep up with demand.”

“The drop in building permits combined with strong real estate numbers could be good news for the market and may help the area avoid a prolonged slump, said Jim Gaines, a real estate analyst with the Real Estate Center at Texas A&M. ‘The builders are looking around and saying we can’t build,’ Gaines said.”

The El Paso Times. “El Paso’s residential real estate market has slowed from last year. Sales of existing homes were down 9.5 percent in the first six months of the year, compared with sales at the same time last year, Greater El Paso Association of Realtors’ data show.”

“Last week, just over 3,600 El Paso homes were listed for sale on the El Paso MLS, about 1,500 more listings than in July 2006, Realtors association data show. The numbers include most existing homes on the El Paso market, and some new homes. Many new homes are not listed on the MLS because they are sold by builders and not Realtors.”

“It’s a buyer’s market definitely. There’s so many houses out there and not enough buyers,” said Realtor Sylvia Olague-Lopez. ‘People are having a harder time qualifying for loans,’ he said, and fewer out-of-town investors are in the market this year.”

“Roxann Martinez and her husband have been trying to sell their three-bedroom home on Rex Baxter on the East Side for about four months so they can buy a new house. ‘We didn’t think we would have this much problem. Our first home sold (four years ago) in a week,’ Martinez said. They have a buyer’s contract on their home, which is selling for $130,000, but the buyer is having trouble qualifying for a loan.”

“Martinez said her home is priced below its appraised value, so she doesn’t want to lower the price.”

“Jan McNutt and several other Realtors said many sellers are cutting their original asking prices to help sell their homes. McNutt said out-of-town investors helped push prices up the past two years, and now that fewer investors are in the market, prices are going down.”

“Sonja Van Nortwick, president of the Greater El Paso Association of Realtors said, ‘I’m not sure if we’ll see another market like last year,’ which she called one of El Paso’s best ever.”

“‘People still want to price (their home) at a higher price and then realize they won’t get quite what they thought they could get’ because of the slower market, Van Nortwick said.”

The Denver Post from Colorado. “Despite predictions that foreclosures would level off this year, new filings rose 26 percent in the metro area through the first half of 2007 compared with the same period in 2006. For every two existing homes sold in the metro area during the first half of the year, another went into foreclosure.”

“The 12,085 filings represent nearly half the 25,513 existing homes sold during that period. With the peak home buying season only six weeks from wrapping up, another dismal record in foreclosures seems unavoidable.”

“‘There is nothing to keep this year’s total foreclosure numbers from well surpassing last year’s,’ said Ryan McMaken, a spokesman for the Colorado Division of Housing.”

“Even in Douglas County, once viewed as immune, new foreclosures filings raced ahead 38 percent in the first six months of this year. ‘There are a lot of houses that were bought as investment properties. Those are going under,’ said Dianne Bailey, the county’s public trustee.”

“Bailey said she is seeing larger homes and wealthier borrowers going into default, in contrast to other areas where novice homebuyers in lower-priced homes have been the ones getting into trouble. Investors, faced with rising payments…and flat or declining home values, appear willing to walk away in greater numbers, she said.”

“‘These are upper-middle-class people. The houses that are being lost are averaging $250,000 and $300,000. We are seeing many $500,000 and $1 million homes going under,’ she said.”

“Denver Post research last year into loans in foreclosure found that while many were adjustable rate products, most had gone into default even before payments reset higher. ARM borrowers may have expected their paychecks and home values would rise enough to offset higher payments, McMaken said.”

“In another troubling trend, public trustees report that a larger percentage of homes going into foreclosure this year are sliding all the way through.”

“Adams County public trustee Carol Snyder said her office sold 1,180 homes at auction in the second quarter of the year. In only 23 cases were mortgages reported as cured, meaning the borrower had caught up. In only 21 cases did borrowers ‘redeem’ or buy back mortgages after the public trustee sold them. In 416 cases, the foreclosure was withdrawn, usually because a lender reworked a loan or agreed to accept a sale by the borrower for less than what was owed on the note.”

“In Douglas County, Bailey estimates only that about 35 percent of borrowers are able to escape foreclosure once they enter in, compared to half last year.”

“More than 11,500 Coloradans, a third of them in the Denver metropolitan area, who did business with national lender Ameriquest Mortgage Co. are eligible for $8.4 million in restitution the firm has agreed to pay in a national, year-old predatory-lending investigation, state Attorney General John Suthers said Thursday.”

“Consumers claimed the company misrepresented the amount of interest they had to pay, inflated home appraisals that left borrowers with unaffordable loans and failed to clearly disclose fees and penalties associated with paying off loans early.”

“Thousands said in multiple lawsuits that they were financially ruined because they lost their homes, were forced into bankruptcy or had their credit destroyed.”

“More than 4,840 borrowers in the Denver metro area are eligible to divide $3.66 million, the highest average statewide. Restitution checks range from $123 to $3,462, Suthers said.”

“The settlement was penned in January 2006, but the amount residents in each state would collect was just determined, Suthers said.”

“‘Doing the right thing for the people we serve has always been one of our core values. We regret those occasions when our associates have not met this ideal to our customers’ expectations,’ Aseem Mital, CEO of ACC Capital Holdings Corp., parent of Ameriquest, said at the time of the settlement.”