At least 7.5 million Americans owe more on their mortgages than their homes are currently worth, according to a real estate research firm's report released Friday.

In another sign that even the rich are suffering in this crisis, a deal to purchase the Kaufmann House, a famous modernist design by architect Richard Neutra, fell apart recently. The Palm Springs home was promoted as a work of art and sold last May at auction house Christie's for $19 million.

But that deal came undone. It's listed now for $12.9 million. Edgar Kaufmann, by the way, was a department store mogul from Pittsburgh who also commissioned Frank Lloyd Wright's famous Fallingwater. He knew something about markdowns.

According to a recent account in the Los Angeles Times, the present owners, a divorcing couple--he's a big wig at bond giant Pimco, have invested about $11 million in the property.

The government is expected to announce soon that it will devote up to $50 billion to directly address the source of the financial crisis: bad mortgages and millions of homeowners at risk of foreclosure.

First American CoreLogic, a data supplier, says that in the July-September period, 18% of all properties with a mortgage were underwater--that is, worth less than the outstanding debt.

The company's data includes over 80% of all mortgages.

Here are some points from the press release:

• Over 7.5 million mortgages or 18% of all properties with a mortgage were in a negative equity position as of the end of September 2008. There are an additional 2.1 million mortgages that are approaching negative equity. These are defined as mortgages within 5% of being in a negative equity position. Negative-equity and near-negative equity mortgages combined account for over 23% of all properties with a mortgage.•

The distribution of negative equity is heavily skewed to a small number of states. Nevada and Michigan have the highest percentages of negative equity - Nevada led the nation with an estimated 48% and Michigan was second with 39%. Five other states have negative equity shares in excess of 20%: Florida (29%), Arizona (29%), California (27%), Georgia (23%), and Ohio (22%).

. New York has the lowest share of mortgages in negative equity at 7%, followed closely by Hawaii (8%), Pennsylvania (9%) and Montana (10%).

The investment sales market has hit a rough patch due to the credit freeze-up, but despite this, Lee & Associates announced today it is launching an investment sales arm, to be dubbed Lee Investment Services Group.

Borrowers streamed back into the mortgage market last week as loan applications jumped nearly 17%, according to a regular survey from the Mortgage Bankers Association.

Centerline Capital Group, a subsidiary of Centerline Holding Company has announced it closed the last of nine multi-family housing loan transactions. All loans were done with Fannie Mae under its DUS program on behalf of a single borrower for a total of $131 million.

Grubb & Ellis Co. said today that Jeffrey Thompson has joined its downtown Los Angeles office as a senior vice president with the industrial group.

Guest blog from BusinessWeek's Mara Der Hovanesian:

The latest sign that the exuberance has ended: the Web’s dancing cowboys have all but disappeared. In the housing boom’s go-go days, LowerMyBills.com, one of the Internet’s biggest advertisers, plastered the Internet with banner ads that featured animated roof-top dancers and knee-slapping cowboys to grab the attention of consumers comparison-shopping for mortgages.

But who feels like dancing a jig these days? In early October the company, a unit of credit agency Experian, quietly pulled those slightly surreal images for another: a grainy video clip featuring a screaming woman holding a baby. The inspiration for the new ad was “to tap into the Halloween spirit,” according to a company spokeswoman.

Ad spending by LowerMyBills.com ballooned from $79 million in 2006 to $128 million in 2007 before subsiding to $30 million in the first half of 2008, according to TNS Media Intelligence.

The company is a unit of the credit agency Experian

Grubb & Ellis|BRE Commercial, Grubb & Ellis Co.'s San Diego affiliate,  represented Bridgepoint Education in its 11-year lease for office space totaling nearly 250,000 square feet at Sunroad Centrum in San Diego’s Kearny Mesa area.