Some housing bubble news from Wall Street. "Toll Brothers Inc. early Tuesday cut its 2006 profit outlook again, blaming a glut of homes on the market and a decline in buyer confidence. The company is scaling back its land position as demand for new homes continues to deteriorate."

"CEO Robert Toll said, 'builders that built speculative homes are trying to move them by offering large incentives and discounts; and some anxious buyers are canceling contracts for homes already being built.'"

"Meanwhile, buyers are waiting on the sidelines to see how the market shakes out, the CEO added. 'The continuing malaise in the housing market, we believe, is the result of an oversupply of inventory and a decline in confidence,' Toll said."

"The company cut its land holdings by 2.2 percent in the third quarter from the previous three months, to 82,800 lots. The company wrote off $21.1 million in so-called 'options,' or contracts to buy land at pre-set prices, according to the report."

From Dow Jones Newswires. "Watch out, California. Your housing market is about to get smacked. The Southern California housing market is 'in the early stages of a tsunami wave of cancellations and price cuts,' predicts JMP analyst Alex Barron. Home builders with big exposure to this market could potentially take a hit that's even bigger than the beating many took in Florida."

"'Demand has hit a wall' in Southern California as skyrocketing prices over of the past few years have made homes less affordable, said Barron. Builders have responded by offering higher incentives and steep price cuts, and by allowing buyers to put down shockingly small deposits, of less than 1%, on homes, he said."

"'Deposits below 1% are a very ominous sign as it signals to us that demand is very weak and homes have now become very unaffordable,' said Barron."

"'One of the more troublesome developments we saw in Southern California was that most builders were spec building entire communities at a time, with very few sales to support this level of construction,' said Barron. 'In one instance, we saw a community of about 100 homes where there were over 20 complete unsold homes, and yet the builder was already building the next 100 homes in the community next door with five sales.'"

"'It appears to us in Florida, the one left holding the bag was the flipper or speculator,' said Barron. 'In Southern California, it appears to us the one left holding the bag is the homebuilder.'"

The Associated Press. "Some mortgage lenders are feeling the heat from Wall Street to tighten their lending standards and cut their exposure to riskier loans. The force at work is the increasing demand from investment banks for lenders to buy back the loans due to borrowers' failure to make their first few payments on those loans."

"At subprime lender Fremont General, the amount of home loans repurchased and re-priced reached $238.4 million in the second quarter, up from $67.7 million in the year-ago quarter. The Santa Monica, Calif., company said it had cut back on 'certain higher loan-to-value products and lower FICO' loans during the second quarter to reduce early payment defaults and thereby loan repurchases from investors."

And Paul Muolo at National Mortgage News. "Investors are starting to eye the default management services market. With an anticipated boom in defaults, some buyers are hoping to get in on the ground floor. Two former Goldman Sachs executives have raised $50 million to buy DFM companies."

"Super-jumbo lenders take note: Life-style guru (and former inmate) Martha Stewart is selling her home in Westport, Conn. The asking price is $8.9 million. The home has been on the market two months. So far, there have been no bids."

"Two decent-sized subprime lenders, both based in Southern California, are expected to announce layoffs in the next week or so."