Some housing bubble news from Wall Street. "Accredited Home Lenders Holding Co., a mortgage company for people with bad credit, needs to raise cash after paying more than $190 million demanded by backers this year. The stock lost almost half its value. 'It's clear now that liquidity is an issue' for Accredited, said analyst Bose George. The wave of margin calls from backers 'shows that lenders are starting to get very concerned.'"

"Accredited said the company has violated terms of lending agreements that require specified 'levels of net income.' Accredited, which earlier this year persuaded creditors to waive the requirement, is now seeking extensions."

From MarketWatch. " Accredited was considered one of the more solid subprime mortgage specialists because it took a more conservative approach to underwriting its loans and accounting for them. About two-thirds of its margin calls have come since Feb. 15. Accredited also said it is pursuing savings, including more job cuts."

From Reuters. "Subprime lender Novastar Financial Inc. said on its Web site Monday that its nonconforming loan production volume in February fell 26 percent from the year-ago period. But even those results were stronger than many investors had expected."

"'The fact that they made loans in February is good,' said an investment analyst who asked not to be identified."

"ECC Capital Corporation today announced that on March 12, 2007 it was notified by NYSE Regulation, Inc. that trading in ECC Capital common stock will be suspended, and the NYSE will take action to delist ECC Capital's common stock, prior to market opening on Thursday, March 15, 2007. ECC Capital is currently structured to qualify as a REIT by managing a portfolio of nonconforming loans."

"Subprime mortgage lender New Century Financial Corp.'s problems deepened Tuesday as the New York Stock Exchange took steps to delist its shares."

"New Century said on Tuesday it underestimated its debt to Credit Suisse by $500 million, the latest snafu for a company under investigation by U.S. securities regulators and facing delisting from the New York Stock Exchange."

"New Century said in a regulatory filing that it has received a grand jury subpoena requesting documents. The subpoena is part of a previously announced criminal probe into trading in its securities and accounting losses by the federal prosecutor in Los Angeles."

"The probes are the latest sign that regulators and prosecutors are taking an interest in the widening crisis in a once-booming industry built around providing mortgages to borrowers with weak credit."

"Also in the filing, Irvine, California-based New Century said the Pacific Regional Office of the Securities and Exchange Commission notified the company by letter that it was conducting a preliminary investigation and seeking some documents."

The New York Post. "Bear Stearns is being blasted by a leading independent research shop that says the Wall Street titan's robust purchase of subprime mortgages has helped fuel the sector's meltdown."

"Describing the firm's buying activity as an example of 'the fee foxes guarding the mortgage hen house,' CreditSights, an independent firm specializing in corporate cash flow and balance sheet analysis, slammed Bear for having subprime loans that have experienced extensive payment troubles and defaults, and 'stood out in terms of weaker performance.'"

"'Bear, and a lot of other dealers - including Lehman Brothers and Morgan Stanley - really aided and abetted this [subprime] industry collapse,' said David Hendler, the lead CreditSights analyst on the study. 'They did nothing to ensure that the loans they were buying were kosher. There was no 'good guy' here, no voice of reason or advocate for conservative standards.'"

From Bloomberg. "Bond investors rattled by mounting losses in subprime U.S. mortgages say trouble is brewing in collateralized debt obligations."

"'When you talk about no documentation loans, you can't have any less of a standard than that,' said Martin Fridson, CEO of research firm FridsonVision LLC. The lenders lower their standards and say 'Well, we can put them into CDOs.' Like that's somehow burying that it's toxic waste.'"

"Investors 'need to worry a good bit' about subprime delinquencies spilling over into the CDO market, said Mark Adelson, head of structured finance research at Nomura Securities Inc.. 'The scenario where the BBBs all blow up is a reasonably possible scenario,' Adelson said."

The Wall Street Journal. "Ruthie Hillery was struggling to make the $952 monthly mortgage payment for her three-bedroom home in Pittsburg, Calif., last summer when a mortgage broker called. The broker persuaded Ms. Hillery to refinance into a 'senior citizen's' loan from New Century that she thought would eliminate the need to make any payments for several years, according to her lawyer."

"Instead, the $336,000 adjustable-rate loan started out with payments of $2,200 a month, more than double her income. In December, Ms. Hillery received notice that New Century intended to foreclose on the property. Then, earlier this month, after a formal demand by the lawyer, New Century agreed to refund all its fees and cancel the loan once Ms. Hillery gets refinancing elsewhere."

"The lawyer, Alan Ramos, says the loan never should have been made. 'You have a loan application where the income section is blank,' Mr. Ramos says. 'How does it even get past the first person who looks at it?'"

"Delinquencies among subprime mortgage borrowers hit a four-year high in the fourth quarter, while home buyers who got loans with low down payments and government backing fell behind at the highest rate ever."

"The Mortgage Bankers Association said 13.33 percent of subprime borrowers, with poor or limited credit histories, were behind on payments in the quarter, the highest rate since the third quarter of 2002."

"'Although the U.S. economy and the job market remain solid, the housing market continued to decelerate in the fourth quarter,' Doug Duncan, the association's chief economist, said in the statement."

"'The delinquencies and defaults have started to soar,' said Nicolas Retsinas, director of Housing Studies at Harvard University in Cambridge, Massachusetts. 'A lot of these lenders started to make loans and lost track of some of the fundamentals.'"

"'The delinquencies are going up, and the rate of the increase doesn't appear to have slowed down,' said Grant Bailey, an analyst at Fitch Ratings. Delinquencies on subprime loans have doubled in the past 12 months, he said. 'So if you graph that, it's a pretty steep line.'"

National Mortgage News. "The Federal Bureau of Investigation's estimate that mortgage fraud costs the lending business $1.2 billion a year is off the mark by more than $3 billion, according to a fraud analyst speaking at the Midwinter Conference in Park City, Utah."

"HSBC Holdings soon will begin unloading some of its on-balance-sheet subprime holdings. Scratch-and-dent investors tell us billions may come to auction."

"Meanwhile, one veteran subprime executive told us he is moving into hard-money 'equity lending,' giving up on subprime for now. He said one secondary market buyer (a Wall Street firm) asked his shop to buy back a loan he sold to them 18 months ago. The executive, requesting anonymity, said, 'Right now there is no bid in the market place' for subprime."

From Origination News. "Mortgage companies scaled back their payrolls by 5,900 full-time employees in January, as the decline in subprime originations and rising defaults took a toll on wholesalers and mortgage brokers.Since October, employment in the mortgage industry has declined for three consecutive months, and 15,500 employees have lost their jobs."

From CNN Money. "Foreclosed properties will add supply to a housing market that already has too much.'[National] inventory is 20 percent higher than last year, vacancy rates have soared and prices are down about 3 percent,' says says economist Dean Baker. 'Now, with the tightening of credit, I don't see how prices don't fall another 5, 6 or 7 percent.'"

"The tightening of credit could take as many as one million buyers out of the market, says Baker, citing Bear Stearns research. 'Even if you cut that in half, say to 400,000 or 500,000, that's huge.'"

"Economist Mark Zandiis also concerned. 'I think the subprime problems will take housing activity to a whole other level,' he says. Zandi is projecting a doubling of subprime defaults this year to 800,000. 'Those homes will go on the market at a discount and will weigh on the market,' he says."

"'Banks have become much more cautious. Lenders are tightening, not just subprimes, but Alt-As (not quite prime) loans and primes as well,' says Ellen Bitton, founder of the Park Avenue Mortgage Group."

"A recovery in the nation's housing market is 'likely' this year, though problems in the subprime lending marketplace and unusual weather have posed challenges in assessing conditions, according to a Tuesday forecast from the National Association of Realtors."

"Total sales this year will be 'fairly close' to the prior year because 'last year started high and ended low,' said David Lereah, NAR's chief economist, in a statement."

"'Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next,' Lereah said. 'Even so, these problems are likely to be contained and not spill over into the prime mortgage market.'"

The Denver Post. "Low home-price appreciation and tighter credit standards could make it harder for consumers to pull equity out of their homes, said Lou Barnes, a Boulder mortgage banker who keeps a close tab on the credit markets."

"New Century's demise is likely to spill over into tougher restrictions for homebuyers with less than stellar credit, big losses for investors in mortgage- backed securities, and fewer options for consumers accustomed to spending down their home equity. 'The spillover may be underway. We may already be soaking wet,' said Barnes."