The upscale San Niccolo neighborhood to the south of this city's bustling Strip once offered the real estate equivalent of the town's loosest slots.

Gamblers willing to bet on a property or two were rewarded with almost immediate payoffs. The guy who sold Karen Lewis her house for $435,000 in June 2006 raked in a $200,000 profit after holding it less than two years, she figures."Houses were really cheap. Loans were really easy," said Lewis, who moved from California. "These were investors who didn't ever live here. Now, they're totally walking away."

In these once-hot markets across the country, the real estate game has screeched to a halt, with unsold homes sitting idle, and buyers nowhere to be seen.

Under pressure to respond, lawmakers are struggling to fashion relief for strapped homeowners while avoiding an undeserved bailout for quick-buck artists caught in the same squeeze. Even as President Bush in a Rose Garden ceremony Aug. 31 proposed aid for those threatened with losing their homes, he promised the government's role will be "limited."

Yet, if Las Vegas is any indication, sorting out the sympathetic hardship cases from those who gambled and lost could prove impossible. While the term "investor" brings to mind Warren Buffett, Vanguard or Fidelity, most of the real estate sharpies here were small-timers. The typical speculator bought "one-sies and two-sies," before finally "getting caught with their pants down," said Frank Nason, president of Las Vegas real estate firm Residential Resources.

Those who failed to cash out ahead of the bust have left owner-occupants such as Lewis stranded in a lonely landscape. Almost half of the 30,000 homes listed for sale in the Las Vegas metropolitan area stand vacant, said Nason, making it that much tougher to sell the rest.

"It's kind of a downward spiral," he said. "In the next year or two, it could get a heckuva lot worse."

From her front door, Lewis stares across Arcata Point Avenue at the for-sale signs on two abandoned houses in foreclosure. The house next door stood empty for months as well, until a couple of out-of-town cops started using it for an occasional vacation getaway.

Between 15 percent and 25 percent of the homes in her 3-year-old gated community are for sale, she estimates, many behind on loan payments and an alarming number deserted, their lawns burnt out and trash untended.

The same problem afflicts Summerlin, the Vegas suburb where Steve Forman's "beautiful, gated, golf-course community" for the 55 and older set has "tons of foreclosures," he said.

"Nobody wants to live on a block with empty houses," said Forman, an apparel executive. "When people come to visit you and all they see are for-sale signs, it doesn't look good."

The Chicago market also is suffering a real estate hangover, as tighter financing puts an end to a period of excess. But it doesn't compare with the free fall in the ex-hot spots of California, Florida, Arizona, Colorado and, especially Nevada, the No. 1 state in foreclosures, according to the RealtyTrac data service, which ranks Illinois No. 15.

"There was a lot more speculation in Las Vegas than in Chicago," explained Paul Kasriel, chief economist at Northern Trust. "It's a gambling town. A lot of people rolled the dice on real estate, and it came up snake eyes."

Though spread unevenly, the dimensions of the bust are immense. This year alone, mortgage lenders nationwide will take the first steps to foreclose on as many as 1.2 million homes owned by deadbeat borrowers, according to RealtyTrac. That 60 percent increase from 2006 "honestly could be a conservative estimate," said Rick Sharga, vice president of marketing at the research firm. "You're talking about a million people losing their homes."

The Mortgage Bankers Association, reporting last week on the rise in delinquencies and foreclosures, cited the higher risk of so-called investor loans made to buyers with no plans to live in the properties they purchased.

Nevada had more of those loans than any other state, and almost one-third of them were at least 90 days past due as of June 30, compared with 13 percent nationwide.

"These investors are much more likely to default on their mortgages if they see the value of their investments falling," the trade group said.

An estimated 2 million adjustable-rate mortgages, many with low initial "teaser" rates, will be resetting at higher levels in the coming months, ratcheting up the pressure.

Sympathies remain divided. Civil-rights groups have called for a temporary moratorium on foreclosures, while conservatives such as tax watchdog Lewis Uhler want borrowers, as he put it, "held responsible for their own mistakes."