Some housing bubble news from Wall Street. The Chicago Tribune, "About 500 Chicago-area workers at LaSalle Bank Corp. and other ABN Amro Bank NV businesses will lose their jobs by mid-2007 as its Dutch parent company looks to cut costs in a competitive environment. ABN Amro has struggled to control costs because the addition of customers in new markets has forced it to set aside more money for loan defaults."

"And more cuts in the industry may be in the offing, said George Morvis, CEO of Hinsdale-based bank consulting firm Financial Shares Corp. 'You'll continue to see more banks get more efficient as business continues to be tough, especially on the retail side,' he said."

The Sun Times. "Layoffs are also expected at Harris, Chicago's third-largest bank, though the timing and the numbers are not yet known, according to spokeswoman Amy Yuhn."

"Yuhn said that as part of a large cost-management effort across Harris parent Bank of Montreal, jobs will be lost and 'Harris is not immune.'"

"Harbourton Mortgage Investment Corp., Mclean-based Harbourton Capital Group's wholly owned mortgage banking subsidiary, stopped funding new mortgage loans and began winding down its operations."

"The company, which funded $1 billion in loans in 2005, says it was forced to make this move as it was unable to resolve mortgage purchase claims made by its investors who had bought mortgage loans from HMIC."

"Harbourton Capital Group is likely to write off its full investment in the mortgage company. Harbourton already has taken significant losses this year as a result of the mortgage operations."

"For the first nine months of 2006, Doral Financial had a net loss of $62.5 million. Doral Financial's financial performance for the third quarter of 2006, compared to the third quarter of 2005, was principally impacted by (1) lower net interest income as a result of a decrease in net interest spread and margin together with a decrease in the balance of interest-earning assets, and (2) non-interest losses driven primarily by losses on securities held for trading, a servicing loss and lower gains on sales of mortgage loans."

"The reduction in average interest-earning assets reflects the sale during the second quarter of 2006 of approximately $2.4 billion in mortgage loans as part of a previously reported restructuring of loan transfer transactions with a local financial institution. It also reflects the discontinuance of the practice of purchasing whole loans for subsequent securitization into mortgage-backed securities."

"Doral Financial's loan production for the third quarter of 2006 was $329.1 million, compared to $1.4 billion for the comparable period in 2005, a decrease of approximately 76%. The decrease in Doral Financial's loan production is due to...changes in the underwriting standards...and competition from other financial institutions."

From Bloomberg. "Low-rated bonds created by Lehman Brothers Holdings Inc. this year through four securitizations of mortgages and home-equity loans to the riskiest U.S. consumers may be cut by Moody's Investors Service."

"The potential for losses has 'rapidly increased' as consumers face financial difficulties, Moody's said. Ratings on Lehman bonds from three securitizations of 'sub-prime' home loans made last year also were put on Moody's list of possible downgrades. A total of 30 bond issues with $416 million in balances were affected."

"The Lehman bonds 'caught our attention' because of the high levels of late payments and foreclosures piling up early in the loans' lives relative to the protection for bondholders they carry, according to Nicolas Weill, a managing director at Moody's."

"'It's hard for us when we just see the numbers to conclude' why mortgages in specific recent deals, such as Lehman's, are performing especially poorly, Weill said."

"Defaults on sub-prime adjustable-rate mortgages made and securitized this year surged 27 percent last month, remaining at the highest level for new loans in five years, Friedman Billings Ramsey said. About 3.2 percent of sub-prime ARM loans, the most common type, were delinquent by 90 days or more, in foreclosure or already seized property, according to the investment firm."

"As of Nov. 1, about 11 percent of the loans backing one of the securitizations, SAIL 2006-BNC2, were at least 30-days late, with 3.6 percent foreclosed upon, according to a securities filing. Some of the 30 bonds being watched by Moody's still offer protection to investors similar to what they started with, despite 'not having had a pretty start,' Smith said."

"Anaheim, California-based Fremont's loans were the fourth- worst performing after the adjustments, while bonds issued by Goldman Sachs, General Electric Co.'s WMC Mortgage unit and Morgan Stanley were the worst, according to UBS. The adjustments reflect things ratings firms consider in assigning ratings."

"The findings probably mean the 'watched Fremont deals represent the tip of a wave of potential downgrades of the 2006 deals,' the firm said.'

From Manufacturing.net. "A slowdown in home building is likely to end the record run enjoyed by lumber manufacturers over the past four years. The Western Wood Products Association said in its forecast that lumber demand fell in 2006 and is expected to slow further during 2007."

"'While home prices will still fall in some areas, we think that housing starts and home sales are nearing a sustainable rate,' said Kevin Binam, the association’s chief economist. 'But construction is going to be lower than we’ve seen in the past few years and that will mean less demand for lumber.'"

The LA Times. "KB Home has dropped plans for now to build a subdivision upriver from New Orleans, a proposed project that was to be one of the largest housing developments in the hurricane-ravaged Gulf Coast region. The Los Angeles company said Thursday that it let expire a contract to jointly purchase 3,000 acres of farmland west of New Orleans."

"Developers had hoped to build as many as 12,000 homes. 'We're really committed to the area, but things didn't work out,' KB Home spokeswoman Caroline Shaw said."