A check on Wall Street for housing bubble news. "Two senators on Thursday filed a measure to require congressional investigators to study whether lobbying activities by Fannie Mae and Freddie Mac further the companies' federally mandated mission of supporting homeownership."

"The U.S. Treasury Department has not seen any acceptable legislative proposal to curb Fannie Mae's and Freddie Mac's $1.4 trillion portfolios short of a Senate bill viewed by some as too strict, Treasury Undersecretary Randal Quarles said on Thursday. If a bill is not passed, Quarles said Treasury would consider the tools it has available to deal with what it perceives as a systemic risk posed by the portfolios. Those tools, he said, include limiting Fannie's and Freddie's debt issuance."

"The National Association of Realtors reports that last year an 'eye-popping 43% of first-time home buyers purchased their homes with no-money-down loans.' Meanwhile, a foreclosure monitor has announced that nationwide foreclosures jumped 24.5% between the first and fourth quarters last year."'

"In somewhat ominous fashion, our Housing Bubble Bellwether Index is now testing its support level. If this bellwether composite of homebuilding, mortgage and real estate stocks breaks sharply to new lows in the next several months, it means the housing bubble unwinding is about to turn ugly."

"Bubbles usually require an external event to create the first pinhole. For stock market bubbles (1999, 1929 and Japan in 1989), it was central bank tightening. For the housing bubble, it may be a combination of rate hikes (14 so far), plus the U.S. Federal Reserve pulling the rug out from under the speculators."

"After two weeks of declines, long-term mortgage rates turned sharply north in the week ending Thursday, with 30-year rates hitting the highest level in over two and a half years. The increase put the benchmark 30-year mortgage at a national average of 6.37%. Last year at this time, the loan averaged 5.85%."

"Frank Nothaft, Freddie Mac vice president and chief economist, said stronger-than-expected gains in manufacturing and service industries, coupled with higher labor costs, 'ignited inflation concerns,' which led to higher mortgage rates this week. 'Financial markets are beginning to think that the Fed will hike rates three more times this year, instead of two, putting upward pressure on mortgage rates,' he said. 'Although the signs are mixed, the housing industry is now beginning to shift into slower gear, and higher mortgage rates will only strengthen that change,' said Nothaft. 'However, we see no signs of a bursting bubble.'"

"Mortgage loan fundings at Countrywide Financial totaled $31 billion in February, up 15 percent from a year ago but down for the second straight month, the company reported today. In January, mortgage loan fundings came in at $33 billion, which was a large decrease from December's fundings of $44 billion."

"Operational highlights included the following: Adjustable-rate loan fundings for February were $16 billion, an increase of 11 percent from February 2005. Home equity loan fundings for February rose by 30 percent from February 2005 to $3.4 billion. Nonprime loan fundings in February were $2.8 billion, up from $2.6 billion for the same period last year.Pay-option loan fundings for the month were $5.6 billion, up from $4.6 billion in February 2005. Interest-only loan volume was $6.3 billion for February, up from $4.6 billion for the same period a year ago."

"The PAD System Report comes out when editor Daniel A Seiver, a practicing finance professor, feels he has something to say. In his current issue, he recommends a new short sale: FirstFed Financial. It's a mortgage company heavily exposed to the Southern California market. which Seiver describes as 'one of the bubbliest and riskiest in the nation.'"

"Plus, he dislikes the company's significant exposure to option ARM loans, where the borrower can elect not to pay interest but instead increase debt. Seiver predicts there will be defaults in a down housing market. He warns that FirstFed may be difficult to short."