Lots of housing bubble news on the lending front. "The parent company of Ameriquest Mortgage Co. and Town & Country Credit said Tuesday it will close all of their 229 branch offices and lay off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations."

"'We are moving strategically and decisively to remain a leader in an industry that is undergoing fundamental changes,' CEO Aseem Mital said in a statement."

"Ameriquest is the nation's largest sub-prime mortgage lender. ACC also operates AMC Mortgage Services Inc., formerly Bedford Home Loans. In addition to the branch closings, effective as of Tuesday, the company was also trimming positions at its headquarters."

"Mortgage banker Accredited Home Lenders Holding Co., a nationwide mortgage company specializing in non-prime residential mortgage loans, said Tuesday Income rose to $35.8 million, slightly below Wall Street predictions."

"CEO James Konrath said, 'Our company delivered another solid quarter of earnings and cost discipline, along with an increase in loan originations and portfolio growth. These results were accomplished during a quarter with the anticipated seasonally softer origination volume and a number of competitors lowering interest rates to borrowers while the cost of money was increasing.'"

"Doug Duncan, chief economist at the Mortgage Bankers Association, has a knack for making people feel secure and optimistic about housing's future. 'The housing market is normalizing,' Duncan said. Loan age and the growth in high-risk market lending will add pressure to loan delinquencies. 'Over half of all loans out there are less than 3 years old,' Duncan said. 'Loans tend to peak in probability of delinquency in 3-5 years of their life.'"

"(Economist) Mark Zandi said that 'builders have done a pretty good job of matching supply and demand' and that 'nationally, house prices and supply will go flat in 2006, 2007 and 2008,' which implies that there will be some price declines in key markets."

And finally, interest rate news from Wrong-Way Bernanke. "Stocks fell on Monday after CNBC's Maria Bartiromo revealed on air that Ben Bernanke felt his testimony last week had been 'misunderstood.' The anchor said Mr Bernanke had told her at the White House Correspondents' dinner in Washington on Saturday that he had not intended the markets to infer that the Fed was nearly done raising interest rates."

"'It comes off as a great example of over-communication and a possible attempt to over-fine-tune, assuming he was willing to go on the record with these comments; CNBC is not the Fed's obvious port of call to correct market expectations,' said Alan Ruskin."