By CAROLYN SAID, San Francisco Chronicle

More than one-fifth of all mortgaged properties nationwide are underwater, with more owed on their mortgages than the homes are worth, according to a report released Wednesday.
First American CoreLogic said that more than 8.3 million U.S. mortgages had negative equity as of year end, compared with 7.6 million just three months earlier.

Perception is finally catching up to reality when it comes to home prices.
A quarterly survey by Zillow.com and Harris Interactive of how people view the value of their homes shows that more people now realize that their single largest asset is declining in value.

Mortgage rates hit stunning new lows last week, falling below 5 percent for the first time in decades. The stampede of refinance applications triggered when rates first starting tumbling in early December continues apace.

Bobbing in Monterey Bay a mile off the coast of Santa Cruz, Calif., the bright yellow buoy doesn't look like anything special. A playful young California sea lion frolicking nearby doesn't give it a second glance.

Edited JP (cut to 760), hold for DNOriginally Skedded 800With 2.2 million homes at risk of foreclosure next year, a national faith-based movement is organizing to lobby Washington to keep families in their homes.

SAN FRANCISCO -- Financial guru Suze Orman's brand of tough love therapy for money matters takes on added resonance with the country mired in economic crisis.

Americans binge on credit in a mania of speculation and consumption until the debt-fueled bubble bursts. Wall Street has a meltdown, the mania turns to hysteria, and the economy goes haywire. That scenario spawned the Great Depression -- and it's painfully clear that similar factors are in play today. Now the question on everyone's mind is: Will it happen again?

What if the bailout doesn't fix the U.S. economy?With panic gripping Wall Street and global financial markets, the notion that the $700 billion rescue plan approved by Congress last week could fall short gained credence even before the first dollar has been spent.

As debate rages over the $700 billion financial bailout, including how it will help troubled homeowners, it's instructive to look at how the government already is addressing a similar class of people: delinquent borrowers from the failed IndyMac Bank.

The United States is undergoing its biggest financial crisis since the Great Depression. Venerable institutions are collapsing. Wall Street is reeling. What does it all mean to the housing and mortgage markets, whose problems triggered these catastrophes?