Some housing bubble news from Washington and Wall Street. And Chicago, " Ken Neumann, president of Warrenville-based Neumann Homes, lashed out at other builders in connection with speculation the company is for sale or on the verge of bankruptcy. The firm is among the 50 biggest builders in the United States, with operations in Wisconsin, Colorado and Michigan as well as Illinois."

"Neumann recently raised eyebrows in local building circles when the company took the unusual step of auctioning 1,000 acres of land in high-growth suburban areas such as Huntley, Sugar Grove and Montgomery. Builders routinely buy and sell land, but most transactions are through brokers; so the decision to opt for a public sealed bid sale caused speculation that it was a way for the builder to raise fast cash."

"The auction came on the heels of reports that Neumann early in 2006 had advised some suppliers and subcontractors it would be late making payments. 'In January, we ran a little bit short of cash, and we called some of our better trade partners, nine in this market area, and only in this market' to advise them of the situation, Ken Neumann said."

From Long Beach. "Federal guidelines cap standard, also known as conforming, loans at $417,000. Anything above that is considered a jumbo loan, and it allows lenders to boost interest from between .25 and .5 percent to help cover their increased risk. There are efforts in Congress to boost the cap, and if successful, future California homeowners, or those who refinance, will save between $100 and $200 per month on their mortgages."

"HR 1461, passed through the House of Representatives, would move up the cap in high-cost areas as much as 150 percent. It's part of a package aimed at reforming Freddie Mac and Fannie Mae. However, there are those that argue that changing the gap won't making housing affordable to those who need it most, and that it would put public-private lending authorities Freddie Mac and Fannie Mae in roles they weren't intended to play."

"'It's a question whether some of these loans fall within the low-and moderate-home buyers' reach,' said Steven O'Connor, of the Mortgage Bankers Association, which has taken a position against raising the cap. Boosting the cap in high-cost areas will create a geographic concentration of large loans issued in places like the East Coast, metropolitan areas and California. A slight downturn in the economy, a rise in defaults that increases housing stock could wreak havoc on markets that are already considered overpriced, he said."

"'Economies are cyclical, and all those housing markets at various times experience rough patches,' he said. '"Your risk exposure's going to be greater.'"

From Paul Muolo. "Citigroup is doing away with its CitiFinancial subprime brand. The company will continue funding subprime loans but the name CitiFinancial will be retired. Company official William Magee wrote to us saying 'the line between prime and subprime has become blurred.' Citigroup will no longer disclose to NMN (and other trade periodicals) its subprime fundings each quarter."

"Wall Street is becoming a bear on loan buybacks. One warehouse executive told us recently that sellers are being offered a choice: either repurchase early defaults or the correspondent buyer will renegotiate the price, resulting in what could be a hefty cash payment. Also, sources tell us that loan buybacks played a role in the recent collapse of Acoustic Home Loans."

"Former OFHEO chief Armando Falcon Jr. said in a speech last week that he didn't have much of an opinion on whether the GSEs should shrink their portfolios until his last year or two on the job. His official position is now: shrink those babies."