Some housing bubble reports from Wall Street. "D.R. Horton, the largest U.S. homebuilder, said Tuesday that quarterly profit fell 51 percent as orders declined, but results topped forecasts. Net sales orders for new homes fell 25 percent to 10,430 from 13,950, while the dollar amount of these orders fell 33 percent."

From MarketWatch."The latest quarter included charges of $142 million, or 28 cents a share, covering inventory impairments as well as $57.2 million, or 11 cents a share, covering write-offs of deposits and pre-acquisition costs related to land-option contracts that the builder doesn't intend to pursue."

"During the conference call Tuesday, D.R. Horton's management said the company's cancellation rate rose to 40% from 29% in the third quarter, underscoring the pullback in the housing market. Gross profit margin on home-sales revenue in the fourth quarter before inventory impairments and land-option write-offs fell to 20.9% from 25.4% a year earlier."

"'This decline was due primarily to core margin deterioration resulting from a lack of pricing power and increased use of sales incentives relative to last year,' said CFO Bill Wheat. The company is focusing on further scaling back its inventory, the CFO added."

"Fellow builder Technical Olympic USA Inc., meanwhile, said it swung to a third-quarter loss of $80 million, from the profit of $70.3 million it generated in the same period a year earlier. The Hollywood, Fla.-based company said the results included $203.9 million in charges resulting from the write-down of assets including investments in joint ventures, write-off of deposits and abandonment costs, and inventory and goodwill impairments."

"The company said its gross profit margin as a percentage of home sales dropped to 17.3% in the third quarter from 27.6% a year earlier. Technical Olympic revised its 2006 profit outlook to a range of $62 million to $72 million on the expectation of 'continued difficult market conditions.' CEO Antonio Mon said the forecast does not include additional impairment charges or deposit write-offs."

"Land sales gains (excluding $20.0 million of write-offs of deposits, abandonment and impairment costs) recorded during the third quarter 2006 were $1.1 million compared to $29.9 million in the prior period."

"'These results reflect the continued deterioration of conditions in most of our markets throughout the third quarter,' said Mon. 'The record level of inventories of new and existing homes combined with diminished buyer confidence has created housing conditions not seen in many years. Our weaker markets continue to experience similar patterns of lower traffic, increased cancellations, higher incentives, and lower margins.'"

"Home sales gross profit was impacted by higher incentives and $29.8 million (or 500 basis points) of asset impairments recorded in cost of sales for homes. Incentives per delivery increased 180% to $22,400 in the third quarter of 2006 from $8,000 in the third quarter of 2005."

"The Company's unconsolidated joint ventures reported a loss of $119.4 million for the three months ended September 30, 2006 primarily due to impairment losses of $143.6 million related to the Company's investment in the Transeastern joint venture and $4.8 million relating to the Company's investment in a Southwest Florida Joint Venture."

"Home Depot Inc. on Tuesday reported a 3 percent drop in third-quarter profit, and sharply cut its forecast for earnings growth this year as the U.S. housing slowdown crimps spending on big-ticket projects."

"'I don't think we've seen the bottom yet,' Home Depot Chairman Robert Nardelli said. 'I don't see anything that suggests it's going to get significantly better in '07.'"

From Origination News. "Fieldstone Investment Corp., Columbia, Md., has reported a loss of $45.0 million for the third quarter, compared with net income of $23.0 million a year earlier. The company, structured as a real estate investment trust, is the parent of nonconforming lender Fieldstone Mortgage Co."

"Michael J. Sonnenfeld, CEO, said the loss resulted from increased reserves needed to cover delinquencies of the newer loans in its portfolio and continued market pressures on sale margins."

"Servicing initiatives include accelerated intervention on delinquent loans, engagement of a delinquency- and loss-mitigation monitor for 2006 production, and elimination of high-delinquency products. 'We have not reduced our credit quality nor changed our pricing discipline to increase originations, and we have eliminated the lowest-credit, highest-risk loans from our guidelines,' Mr. Sonnenfeld said."