Some housing bubble reports from Wall Street and Washington. "Countrywide Financial said Thursday that August mortgage fundings fell 24% to $40 billion. 'Total mortgage loan fundings..declined year over year as a result of the expected industry slowdown,' CEO Angelo R. Mozilo said."

The LA Times. "Countrywide Financial regularly warns customers about the risks of paying less than the interest due on loans offering that option. Now Chief Executive Angelo Mozilo is calling some of them personally. Mozilo reached out to borrowers as part of a 'little experiment' to understand the reasoning behind making only minimum payments on so-called pay-option loans."

"Mozilo said he wanted to know why customers were paying only the minimum. 'The answer was, 'I'm doing it because the rate of negative amortization is less than the increased value in my house each month,' Mozilo said. 'The average age of our borrower is about 38 years old. They have never in their adult lives seen values going down. The concept is alien to them.'"

"'What we're finding out is that they're pretty smart,' Mozilo said. 'It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions.'"

"The U.S. housing market is just returning to normal and is not poised to crash, several economists and industry leaders told lawmakers on Wednesday. 'Markets in Florida, California, Arizona, Nevada, Virginia and Maryland have exhibited trends far above the local historical norm,' said National Association of Realtors President Tom Stevens."

"'Because of these exceptional trends, it would not be surprising for these markets to experience a price adjustment,' Stevens added."

From Reuters. "The two executives who led Fannie Mae to an $11 billion accounting scandal can expect federal regulators to file lawsuits against them, the head of the Office of Federal Housing Enterprise Oversight said Wednesday. When asked if legal action was likely against Fannie Mae's former CFO Timothy Howard and former CEO Franklin Raines OFHEO director James Lockhart did say 'they are the top two.'"

The Associated Press. "The U.S. economy is headed for a slowdown caused by a cooling housing market, the International Monetary Fund warned Thursday. 'The forecasted (U.S.) housing slowdown is well and truly here,' Raghuram Rajan, the fund's chief economist said. 'Indeed, rising inventories of unsold houses suggest things will get worse before they get better.'"

The Wall Street Journal. "Coming up with the money for a down payment on a new condominium may soon be as easy as charging it: American Express Co. is expected to announce today that it will allow some customers to use its cards to make condominium down payments."

"Siva Tayi, a potential Manhattan condo buyer from Houston, plans to charge the 10% down payment on a $1.2 million two-bedroom unit on his Platinum card. 'I thought it was a good idea to use the [card] and gain the points,' says Mr. Tayi."

Danielle DiMartino at the Dallas News. "So we know the housing market is melting down. What we don't know is when it will stop. 'The housing experience of 1999-2005 was a classic case, in our opinion, of how a boom (1999-2001) turns into a mania (2002-2003) and ultimately morphs into a bubble (2004-2005),' Merrill Lynch chief economist David Rosenberg wrote in a recent report."

"'Unwinding the excesses of the past six years will undoubtedly take time, but the adjustment won't likely be any less painful, and in the process will act as a lingering constraint on confidence and spending,' he said."

"Goldman Sachs' chief eceonomist, Jan Hatzius, figures national home prices will decline 5 percent in 2007, further pressuring borrowers who are upside down. 'If there is little or no equity, it will be hard for homeowners to sell their way out of trouble,' he warned."

"Although we don't have nationwide data, it's clear that universally lax lending standards have turned some homebuyers upside down from coast to coast."