Some housing bubble news from Wall Street. "Single-family homebuilder Standard Pacific Corp. posted a fourth-quarter loss of $98.4 million, compared with net income of $154.9 million, in the year-ago period. The recent period's results include impairment charges of $290.7 million."

"'Our guidance for 2007 does not reflect additional inventory impairment charges or write-offs of land deposits and preacquisition costs for abandoned projects,' CEO Stephen Scarborough said in a release. 'If general or local market conditions deteriorate further, or our competitors change their pricing strategies, we may have to further reduce home prices or adjust our discounts and concessions which may, in turn, trigger additional impairments.'"

From MarketWatch. "M/I Homes Inc. Thursday said it swung to a loss in the fourth quarter of $11 million, compared with net income of $41.3 million a year earlier. The home builder said its quarterly results included pre-tax land-related impairment charges of $69.8 million, and $3 million worth of land and lot option deposit and pre-acquisition write-offs. The company said new contracts in the fourth quarter plunged 61% from the year-ago period."

"Robert Schottenstein, CEO, commented, '2006 served as a healthy reminder of something that we have always known, that homebuilding is a cyclical business. We faced adverse and challenging conditions in most of our markets. We employed a defensive operating strategy on virtually every front, making the cuts necessary to right-size our business, incurring land-related impairment charges and write-offs and reducing our lots owned and controlled by 27% from a year ago."

"Brookfield Homes Corporation today announced financial results for the year ended December 31, 2006. Net income for 2006 totaled $148 million, a decrease of $71 million when compared to 2005. These decreases are primarily related to fewer home and lot closings, and a decrease in housing gross margins to 26% in 2006 from 30% in 2005. Net income in 2006 includes write-downs of $10 million related to finished lots acquired in 2005 and lot options on unentitled land that expired."

Investors Business Daily. "Growing competition for renters could inflict short-term pain on the (apartment) industry. The competition is coming from several places. Would-be condo converters are returning thousands of units to the rental market in response to the condo-buying binge's reversal."

"People who bought single-family homes hoping to soon sell them for a quick profit have given apartment owners perhaps the biggest competitive surprise of late: These now financially hamstrung speculators are putting the houses up for rent."

"BRE Properties (which) owns and operates about 27,000 apartment units in the West, is facing such competition. A growing number of single-family homes are being rented in markets such as Phoenix and San Diego, BRE executives said. The supply of single-family home rentals is increasing in Sacramento too. In the fourth quarter last year, apartment occupancies fell to 92.5%."

"Camden Property Trust, a Houston REIT that owns and operates about 64,000 apartments in 15 markets, has encountered a similar competitive situation in Las Vegas. President Keith Oden is quick to point out that the single-family rentals are competing with the company's three-bedroom apartments."

"'There's no question that in Las Vegas, we're seeing an impact from the rentals of single-family homes,' he said."

The Financial Times. "The giant US subprime mortgage business is displaying a new-found caution with lenders tightening loan standards and cutting ties to overly aggressive brokers, delegates to an industry conference were told this week."

"An index that measures the health of bonds backed by subprime loans, which are made to borrowers with tarnished credit histories, flashed new warning signals. The index...reached a record 640 basis points on Wednesday and was trading at 625bp yesterday. The spread has widened by about 150bp in the past week."

"'Originators have been lulled into complacency by the strong performance of the mortgage market in the last few years,' said Elizabeth McCaul, former New York superintendent of banks."

"The risk of default by financially stretched homeowners remains the greatest challenge to the $6,000bn-plus market for bonds backed by US mortgage loans, according to a survey unveiled at the conference."

"'With subprime mortgages, you’re dancing on the edge of a razor blade – they’re awful investments,' said John Devaney, CEO of United Capital Markets, a specialist in distressed asset-backed securities."

"Tony Hughes, economist at Moody’s Economy.com, told the conference: 'There’s a chance that the commercial banking sector is acutely at risk if there’s a blow up in housing.'"

From Bloomberg. "Defaults on mortgages to people with poor or limited credit histories in November rose to the worst level since the last recession in 2001, according to Friedman Billings Ramsey Group Inc."

"The percentage of so-called subprime mortgages packaged into securities and delinquent by 90 days or more, in foreclosure or already turned into seized properties rose to 10.09 percent from 9.08 percent in October, analysts wrote."

"'These borrowers are very leveraged and have little skin in the game' because they took out loans with small, or no, down payments and many of them haven't seen their properties appreciate, Debashish Chatterjee, an analyst at Moody's said."

"U.S. home prices fell from the previous month in August, September, October and November, the first monthly declines since December 2001, according to the S&P/Case-Shiller Home Price index, which tracks prices in 20 major metropolitan areas. The price drops accelerated to 0.41 percent in November."

"Rates on about $600 billion of subprime home loans will start adjusting this year, according to Bear Stearns Cos., the largest underwriter of mortgage bonds. Foreclosures begun on subprime adjustable-rate mortgages, or ARMs, rose to a four-year high of 2.19 percent in the third quarter as borrowers struggled to pay mortgage bills while interest rates increased, the mortgage bankers' group says."

From Origination News. "Second-lien originator DeepGreen Financial, Cleveland, has gone out of business, according to officials close to the situation. Owned by Lightyear Capital, a New York-based investment fund, DeepGreen's telephones no longer answer, and its website has been shut down. Since its inception in 2000, DeepGreen funded $5 billion in loans. Lightyear Capital declined to comment."