Some housing bubble reports from Wall Street. "First Horizon National Corp. said it expects a $1 billion reduction in its mortgage originations in the third quarter, which will help drive earnings down. The Memphis-based lender said that in addition to reduced production, earnings are down because of lower gains on sale margins and increased costs to hedge the risk of servicing its loans."

"Margins, which were 122 basis points in the second quarter, are expected to range between 85 and 90 basis points this quarter. Hedging costs are up $5 million over the last quarter."

"The recent drop in the 10-year treasury rate and the resulting inversion of the yield curve have changed the dynamics within the mortgage secondary market. As a result, First Horizon Home Loan's gain on sale margins fell significantly below second quarter levels."

"Although we currently expect some modest improvement in mortgage banking in the fourth quarter, the current operating environment suggests that mortgage banking operations will only be in the range of break-even in the fourth quarter while our other two businesses should continue to perform in line with expectations."

From USA Today. "It's not just companies that build houses that are seeing their stock prices crumble under the weight of a weakening real estate market. Shares of mortgage lenders who provide the cash to finance deals are also sinking."

"The outlook for lenders has become gloomy amid growing signs that the five-year housing boom is over. The fallout: Fewer people are taking out mortgages. Overall applications are down 25% vs. the same period a year ago, the Mortgage Bankers Association says."

"Also weighing on home lenders is the potential financial fallout from the use of exotic mortgages. 'Borrowers are missing more of their payments than before,' says analyst Matthew Howlett. 'A downturn will hit the subprime market first,' says Jay Brinkmann, an MBA economist."

"Another headache for mortgage lenders is the constant drumbeat of negative news on the housing sector."

From Danielle DiMartino. "The bulls insist homebuilders are safer than in prior down cycles because they've consolidated into a group of stronger players. 'I don't buy it,' said Mark Kiesel, bond portfolio manager at Pacific Investment Management Co."

"The flaw, he explained, is that their newfound critical mass emboldened builders to be overly aggressive with land commitments. Land is where things begin and end for builders; it's where they take their longest-term, and therefore riskiest, gambles."

"'The builders have finally realized they've been hit with a truck, and they're trying like mad to get out of their land commitments,' he said."

The Deseret News in Utah. "Speculative real estate investors could ruin Utah's happy housing market, sending home prices nose-diving, according to Clark Ivory, chief executive officer of Ivory Homes, Utah's largest homebuilder."

"Behind the soaring prices, which are pushing homes beyond the reach of many working families, are speculators, Ivory contends. And he is blunt when it comes to homebuilders selling out to speculators, saying their motives amount to 'short-term greed and thoughtlessness.'"

"'I basically have let my people know that if they sell to an investor and they knowingly do it, they are going to have trouble with management, and that means their job,' Ivory said. 'That's how serious it is to us. I just think we ought to be careful and not let our market become artificially inflated so that we then have to see adjustments,' Ivory said."

"Ivory concedes there is no way of knowing how many speculators are out there. However, it is true that total unsold new housing inventory in the greater Salt Lake region is climbing. In the second quarter, unsold new housing inventory rose to 12,102 units, a 29 percent increase from 9,418 units in the second quarter of 2005."

"Jeff Hansen, CFO of Sandy-based Liberty Homes, said he believes the percent of speculators in the market is much higher. Like Ivory, Hansen said such speculators can be damaging to the real estate economy by artificially pumping up prices."

"'Will there be a correction in the future here in Utah? I think there will be,' Hansen said. 'We are riding a high right now.'"