Some housing bubble news from Wall Street. "Lennar Corp., one of the nation's biggest homebuilders, posted a fourth-quarter loss on Wednesday in contrast to a profit a year ago as revenue tumbled 15 percent and it absorbed big charges related to the housing market slowdown. Lennar also said it expects housing deliveries will decline more than 20 percent this year as it tries to unload inventory."

"Lennar lost $195.6 million in the three months ended Nov. 30. The latest quarter includes write-offs of option deposits and pre-acquisition costs of $111.1 million and valuation adjustments of $382.8 million."

"The dollar value of Lennar's backlog plunged 42 percent to $4 billion. Further, Lennar reported that it does not intend to purchase more than 24,000 home sites that it had under option to buy."

From MarketWatch. "Lennar Chief Executive Stuart Miller in a statement Wednesday said market conditions remained 'depressed' through the end of the fourth quarter. 'We have continued to build out our inventory, deliver our backlog and convert inventory into cash.'"

"Lennar's gross margins on home sales fell in the fourth quarter partly on land charges and the use of more sales incentives. The company said the average sales price of homes delivered in the fourth quarter fell to $302,000 from $338,000 a year earlier. Sales incentives offered to homebuyers averaged $47,300 per home in the fourth quarter, up from $10,600 the previous year."

"'We have not changed our outlook that the housing downturn should be extended by continuing price declines in the spring selling season, but we do believe Lennar is strategically better positioned than its peers, Deutsche Bank analyst Nishu Sood wrote."

"'We note that it is likely management's [2007] outlook may be more optimistic than ours with regards to pricing; nevertheless, this guidance reflects the aggressiveness of Lennar's strategy to date,' the analyst said."

"'We think the guidance may be difficult to achieve, as the high level of homes for sale will likely continue to pressure home prices, absent a sharp improvement in demand,' wrote Banc of America Securities analyst Daniel Oppenheim."

"Miller during Wednesday's conference call said market conditions remained 'very difficult' through the end the company's fourth quarter. 'While it is not our custom to comment or update our view of the market in the middle of quarters, I will say that we have not yet seen improvement in market conditions to date as we've gone through the seasonally slowest time of the year,' the CEO said."

"Residential Capital LLC, a real-estate financing company owned by General Motors Acceptance Corp., said it will eliminate 1,000 positions by October to reduce costs as the mortgage lender grapples with 'the continued deterioration' in the subprime mortgage sector."

"ResCap estimated that it would incur about $10 million in severance and related costs associated with the workforce reduction. Also as a result of the job cuts, it expected to save $65 million in the full-year 2008."

From Reuters. "A GMAC spokeswoman said the parent company had begun an effort to integrate ResCap more closely about a year ago in a bid to cut costs across its lending operations."

"In its filing with the SEC, ResCap cited slower mortgage originations, a weakening trend for U.S. home prices and weakness in the sub-prime sector of the lending market as reasons for the job cuts."

National Mortgage News. "A 'couple of hundred' mortgage banking firms could fail in the next year or so as the industry works out its excess capacity, according to the chief economist for the Mortgage Bankers Association."

From CNN Money. "Americans continue having difficulties paying their mortgage obligations, with December foreclosure rates above the 100,000 mark for the fifth straight month. The number of homeowners entering into some stage of the foreclosure process in December was up 35 percent from December 2005, according to RealtyTrac."

"Adjustable rate mortgages, especially sub-prime ARMs, continue to drive the spike in foreclosures: Many of those loans are due to reset in 2007 and many of the loans written in 2006 are performing less well than previous years."

"Other factors are involved. One is that the housing market turned, removing one avenue of escape for some homeowners facing foreclosure. Another contributor is that some lenders tried to maintain business in a slower market. To do that, some relaxed their underwriting standards, approving more marginal borrowers for loans."

"Interest rates were also higher for the year. Doug Duncan, chief economist for the Mortgage Bankers Association, estimates that $500 billion to $800 billion in loans outstanding are to borrowers who may face difficulties. 'Some of that,' Duncan says, 'would go into foreclosure.'"