Some housing bubble news from Washington and Wall Street. "'Congress and the American people were misled by the former leadership' of Fannie Mae and Freddie Mac, Rep. Michael Oxley, chairman of the House Financial Services Committee, said at a hearing. Oxley said the report underscored the need for a tough new regulator of Fannie Mae and Freddie Mac, according to accounts."

"Fannie Mae disclosed Monday that it had found more errors in its accounting review. The House in October passed legislation written by Oxley that would bring stricter federal oversight of the two government-sponsored companies, reports said. But the White House opposes that bill because it would not force the two mortgage giants to reduce their mortgage investment holdings, reports said."

"'We are focused on doing what is right for the taxpayer,' Emil Henry, assistant Treasury secretary. 'While many of the issues in the report are in the process of repair, I think it's clear that the elephant in the corner, the legacy of that era, is the extensive retained portfolio which..in our judgment is something that presents systemic risks.'"

"The American Bankers Association's Economic Advisory Committee said it expects the Fed to raise overnight interest rates by a quarter percentage point to 4.75 percent at its meeting on March 27-28. It said another increase at the next policy meeting in May was likely."

"One economic risk the group cited was the slowdown in the U.S. housing market. While the group said it expects housing to moderate, not take a nose dive, many uncertainties remain, including the impact of a push by federal bank regulators to make lenders tighten up underwriting standards on risky, alternative mortgage products. (Economist) Robert McGee, echoing other economists, said house prices are unlikely to decline nationwide, but some areas that experienced more significant gains could see prices drop."

"Countrywide Financial Corporation is filing this Current Report on Form 8-K to provide a summary of pay-option loans held for investment at December 31, 2005."

Total pay-option loan portfolio

2004..$4,701,795,000

2005..$26,122,952,000

Accumulated negative amortization (from original loan balance)

2004..$29,000

2005..$74,815,000

The CFC insiders are still at it.

And Reuters reports on a planned IPO. "Clayton Holdings Inc., a provider of services to the mortgage-backed securities market, plans an IPO worth about $100 million. The company provides automated back-office services for mortgage processing. However, analysts noted widespread concerns that the U.S. housing market is cooling could spook investors."

"'When you're in an industry that's out of favor, a lot of times it doesn't matter what you do, just the fact that you're in that sector is a concern,' Tom Taulli said. 'This is an IPO they should have taken out last year when the market was hot.'"