By CAROLYN SAID, San Francisco Chronicle

Can folks who made millions peddling subprime loans use that same Midas touch to mint money from the housing-market downturn?

On a dazzlingly clear day last week under the high-noon sun, Bob Franklin and Dennis Vied taxied their Cessna Turbo 206 down the runway at Livermore Municipal Airport, east of Oakland, Calif., and took to the sky in search of a public-health menace.

A vast "shadow inventory" of foreclosed homes that banks are holding off the market could wreak havoc with the already battered real-estate sector, industry observers say.

After a year of fruitlessly asking Washington Mutual to lower her mortgage payments, Stacey Rustrum marched into a bank branch in Oakland, Calif., this week hoping that in-person help would accomplish what her hours of phoning had not.
"I saw this on the news this morning and came on down," she said. "They can't pretend I'm not here."

After a year of fruitlessly asking Washington Mutual to lower her mortgage payments, Stacey Rustrum marched into a bank branch in Oakland, Calif., this week hoping that in-person help would accomplish what her hours of phoning had not.
"I saw this on the news this morning and came on down," she said. "They can't pretend I'm not here."

Exiled Nigerian princes are old hat.
The hottest come-on these days, clogging e-mail in-boxes, voice mail and radio airwaves, goes something like this: "Are you struggling with your mortgage? President Obama approved the new federal loan modification program. We can help lower your mortgage payment."

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.

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.

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.