Some housing bubble news from Wall Street. "KB Home posted a net loss of $49.6 million for the fiscal fourth quarter on Tuesday, as it took $343.3 million of pretax charges for abandoning land option contracts and writing down the value of inventory, a consequence of the U.S. housing market downturn."

"Net orders fell 38 percent in the quarter to 6,059, KB Home said. The cancellation rate was 48 percent in the fourth quarter, up from 31 percent a year earlier."

"'Last year was clearly a turning point for the U.S. housing market,' said CEO Jeffrey Mezger. 'During the second half of the year, an oversupply of unsold new and resale homes, reduced affordability, and greater caution among potential homebuyers heightened competition among homebuilders and sellers of existing homes, prompting the aggressive use of price concessions and sales incentives.'"

"'Our results were further affected by declining land values and the resulting charges we recorded in the fourth quarter to reflect lower land values,' said Mezger."

"The Company’s housing gross margin decreased to 11.7% in the fourth quarter of 2006 from 27.1% in the prior year's quarter, in large part due to pretax non-cash charges of $152.7 million for inventory impairments and $88.3 million for land option contract abandonments, as well as an increased use of price concessions and sales incentives. Excluding the non-cash charges, the fourth quarter 2006 housing gross margin was 18.8%."

"'As the year progressed, market conditions worsened, cancellations increased, net orders declined and margins came under pressure,' said Mezger. 'The result was a 2006 year-end backlog substantially below the year-earlier level. At a minimum, this will likely result in a year-over-year decrease in our unit deliveries through the first half of 2007 and potentially longer.'"

The Dallas Morning News. "In the midst of the biggest housing slump in over a decade, industry watchers are already trying to figure out where the business will head when the downturn is over."

"Fort Worth-based builder D.R. Horton Inc. has been one of the biggest buyers of building companies, acquiring more than a dozen firms since the early 1990s. During last month's earnings conference call, analysts asked Horton's officers if they were shopping again."

"'The only reason we would want to do that is if we felt like we would need to add to our current land and lot inventory, which at this stage in the game we absolutely do not,' CEO Don Tomnitz said."

"National Association of Home Builders's Gopal Ahluwalia said that top homebuilders are holding about six years of land inventory. 'Now, with the decline in the housing market, that is causing more trouble,' he said. 'A lot of builders have disposed of land.'"

"Some homebuilding execs may be short on the experience to find their way through the current downturn, said industry consultant Michael Kahn. 'If they came into the business after 1993, most of them have no idea what a down cycle really means,' Mr. Kahn said."

"Some equity investors are also considering purchases of public homebuilders whose stock is depressed. 'We've been dealing with a number of private-equity groups that are looking to get into the business,' Mr. Kahn said. 'They are headed for a disaster,' he said."

From Bloomberg. "ResMae Mortgage Corp., a U.S. home lender to people with bad credit, filed for bankruptcy protection and said Switzerland's Credit Suisse Group agreed to buy its assets to for $19.1 million."

"'Despite the earlier successes and persistent efforts of ResMae's management team, the subprime mortgage market has recently been crippled and a number of companies stopped originating loans as U.S. housing sales have slowed and defaults by borrowers have risen,' ResMae said in its Chapter 11 filing yesterday with the U.S. Bankruptcy Court."

"Closely held ResMae is at least the 20th mortgage company to be sold or closed as delinquencies surge and the market for home loans to risky borrowers contracts at the fastest pace ever."

From Reuters. "On Monday, Moody's Investors Service said delinquencies of 60 days or more on securitized prime jumbo mortgage loans rose to 0.323 percent in November, the highest in 2006. That was also 8.7 percent higher than the 0.297 percent in November 2005, when the rate reached a 'temporary apex' following Hurricane Katrina three months earlier, Moody's said."

"On Friday, Countrywide said foreclosures rose to their highest level since at least 2002, while delinquencies held near a five-year high."

"Early this month, Friedman Billings Ramsey & Co. said the default rate on subprime loans that were packaged into bonds reached their highest level this decade."

"Then on Wednesday, in a report titled 'Inferno,' Credit Suisse analysts said the 60-day delinquency rate for second-quarter loans that were six months old had doubled from a year earlier to 5.7 percent."

From CNN Money. "Some experts estimate that rates for subprime mortgage loans could rise a half to three-quarters of a percentage point because of the higher default rates, and that could top a full percentage point if the default problem gets worse."

"'Market forces in general will exert discipline on the process,' said Sandler O'Neill analyst Mike McMahon. 'Investors in lower-rated (mortgage securities) will demand higher yields, or alternately they'll pay less for the securities, which will force the underwriters of this product to demand higher quality mortgage loans.'"

"McMahon and other experts say either move is likely to stop some potential home buyers from getting the financing they need to buy a home, money they might have been able to get in recent years."

"'At the margins what this is doing is making mortgage credit less accessible to some people,' said Bose George, an analyst who follows New Century and other subprime lenders. 'Maybe it's a cohort that shouldn't be borrowing in the first place.'"

From MarketWatch. "The number of U.S. homes entering the foreclosure process because of nonpayment on mortgages rose to 130,511 in January, 25% more than in January 2006, according to Realtytrac."

"There were 14,728 foreclosure filings in Texas. Detroit had the highest foreclosure rate among cities: one for every 124 households. Greeley, Colo., had a foreclosure rate of one in 173, while Atlanta had one for every 214. Foreclosures doubled in Detroit and rose by 25% in Atlanta compared with December."

"'January's foreclosure number represented the highest monthly number we've seen since we began issuing this report two years ago,' said RealtyTrac CEO James Saccacio."