Some housing bubble reports from Wall Street and Washington. "Housing starts rebounded from a nine-year low in February, according to the latest government reading on the battered home-building industry, but ongoing weakness led builders to pull back on plans for more housing. The February starts were 28 percent below February 2006 numbers, and were the fifth weakest reading since the beginning of 1998."

"Permits for single-family homes fell to a nine-year low and are now down nearly a third from year-ago levels. 'With the weather volatility, I think the permits is a better representation of the true trend,' said David Seiders, the chief economist for the National Association of Home Builders. 'I think we'll see a drop off in starts in March, and certainly no take off after that.'"

"Builders reported seeing some effect from the rising problems in the subprime mortgage sector. 'A surprising number say they've noticed some negative impact of the tightening of lending standards on their sales,' said Seiders. 'I don't expect the builders to be cranking out the starts on a sustained basis for a while. The mortgage market problems only are likely to add to that.'"

From MarketWatch. "'We are more interested in permits as they are much less weather-affected than starts,' said economist Ian Shepherdson. He noted that single-family homes, fell at a 17.7% annualized rate in the three months to February from the previous three months. 'This is a less rapid drop than in [the second half] of last year but it is still clearly a decline,' Shepherdson said. 'Excess inventory is still a huge problem.'"

"The trouble in the mortgage market could spread beyond the subprime sector with tighter lending standards cutting demand for new homes by as much as 15% and further squeezing home-builder profits, according to an analyst following the industry."

"'We expect lending standards to tighten further, based on our expectation of further [home] price declines in 2007,' wrote Banc of America Securities analyst Daniel Oppenheim."

"A big issue facing residential home builders is the oversupply of homes on the market after the speculative bubble. The inventory glut combined with lower demand resulting from stricter lending standards 'will lead to lower prices and likely exacerbate mortgage delinquencies and foreclosures,' Oppenheim said. "

The Associated Press. "The Securities and Exchange Commission is investigating a number of companies that operate in the troubled market for subprime mortgage loans, the agency's top enforcement official said Monday."

"Comments by SEC Enforcement Director Linda Thomsen on Monday were the first public acknowledgment that the agency was involved in a broad examination of the subprime sector within the mortgage industry."

"'We're looking at subprime,' Thomsen told reporters following an address to an investment conference. 'As with anything, we're going to look at all the actors and their roles.'"

"The role of major Wall Street investment firms in the subprime market debacle is under scrutiny. In Massachusetts, the state's top securities regulator said last week that he had issued subpoenas to two major firms, UBS Securities LLC and Bear Stearns & Co. Inc., as part of an investigation into whether their analysts' research ignored subprime lenders' mounting financial problems."

From Reuters. "U.S. Senate Banking Committee Chairman Chris Dodd said on Monday he asked executives at five big subprime mortgage companies to testify at a Thursday hearing and explain their lending practices."

"Officials with the Federal Deposit Insurance Corp., the Federal Reserve, the Office of the Comptroller, and the Conference of State Bank Supervisors also were asked to testify."

"'At the very least, homeowners facing foreclosure deserve to know what factors contributed to their dire financial straits, and what steps are needed to fix this pressing problem,' Dodd said."

"Dodd has said that regulators bear some responsibility for the recent downturn in the subprime mortgage market, vowing to bring them before the Senate panel to explain how the subprime market has arrived to this point."

From Bloomberg. "Banks are picking up the baton from the Federal Reserve, restricting access to credit months after Chairman Ben S. Bernanke stopped raising interest rates."

"'The market is definitely tightening standards, and to the degree the market controls the flow of capital, the Fed does not have to,' said Carl Tannenbaum, chief economist at ABN Amro Holding. Officials have kept their tightening bias at the past five meetings, meaning any policy shift is likely to be a rate increase."

"Fed officials may discuss the tightening in mortgage lending and its impact on the economy, already slowed by a housing recession, at their two-day meeting that starts today."

"The Fed may alter its language to reflect the tumult in subprime mortgages. On Jan. 31, the Federal Open Market Committee said 'some tentative signs of stabilization have appeared in the housing market.'"

"'That might be a little bit of a stretch' this time, said Diane Swonk, chief economist at Mesirow Financial in Chicago."

The Hartford Courant. "Mitch Heffernan is involved in starting a new mortgage business, but his old company, the now-defunct Mortgage Lenders Network, could land him in plenty of trouble with the state for not paying wages earned by his former employees."

"The state Department of Labor confirmed Monday that it has applied for an arrest warrant in Superior Court in Middletown that would charge Heffernan' the former president of Middletown-based Mortgage Lenders' with 61 counts of failing to pay wages."

"Mortgage Lenders, once touted as a model for adding financial services jobs to the state, imploded as troubles in the so-called subprime market accelerated late last year."

The Chicago Tribune. "Corus Bankshares Inc. on Thursday warned investors that its stock holding in troubled subprime lender Fremont General Corp. is now 'materially impaired,' and that as a result the Chicago-based bank holding company will have to absorb a hefty first-quarter pretax charge that could be $14 million or even higher."

"It said company officials have concluded that Fremont General's troubles are so extensive that, under generally accepted accounting rules, Corus must treat its Fremont investment as an 'other-than-temporary' impairment and take a charge to mark down the value of the asset."

The LA Times. "The shakeout in the sub-prime lending industry continued Monday, with more people losing their jobs and a prominent lender losing its name on a baseball stadium." "Fremont General Corp. of Santa Monica said it had told 'significant numbers' of its 2,400 home-loan employees to expect pink slips in two months."

"The Orange-based parent of Ameriquest Mortgage Co. and Argent Mortgage Co. announced large but unspecified layoffs last week. On Monday, Ameriquest said that its name was coming off the Texas Rangers' baseball stadium in Arlington, Texas."

"'You almost can relate this to the aerospace industry, when they had those massive layoffs' after the end of the Cold War, said Jack Williams, president of the California Mortgage Brokers Assn."

"Williams, a Brea mortgage broker, said most of the companies that remained in business were scaling back their operations. That reflects not only the shrinking volume of loans but also the fact that the riskiest sub-prime loans were no longer being offered."

"'When you take the products away, you no longer need the underwriter for them or the supervisor for that line,' he said."

"The housing slowdown is prompting Wells Fargo to ax 191 workers at its mortgage operations in Tempe, Ariz, the Phoenix Business Journal reported this week."

"The San Francisco bank said the layoffs, are due to the tighter lending policies reducing the level of subprime mortgages extended to those with tarnished credit records or high debts in relation to income."

"'As a result of changing market conditions, such as moderating house price appreciation, effective Feb. 16, we tightened our credit policy for a portion of our nonprime lending business,' Lynn Greenwood, a senior VP in the Wells Fargo home and consumer finance group, told the Phoenix newspaper."

"'This decision directly impacts our nonprime loan volume, which in turn impacts staffing levels in the areas devoted to managing these loans,' Greenwood said."

"Wells Fargo is not alone. Bank of America, Countrywide Financial, Washington Mutual and Ameriquest Mortgage have all cut jobs in Arizona in response to the housing slowdown."

From Builder Online. "David W. Berson, chief economist for Fannie Mae is predicting a drop of 7 percent to 8 percent in new-home sales for the remainder of 2007 but says the worst declines have passed."

"With subprime loans dominating the news recently, Berson explains that the ease of getting the loans contributed to the recent troubles that New Century Financial Corp. and Accredited Home Lenders Holding Co. are facing. There would have been 850,000 fewer home sales in 2006 if it weren't for subprime loans, Berson explains."

"'We will see what happens in the subprime market and whether regulators eliminate the subprime market,' he says."

"Berson says he agrees with former Fed chief Alan Greenspan's recent assessment that there is a chance that the nation could go into a recession."

"'If we have a recession, it will be bad for the industry,' Berson comments. 'We better hope the economy keeps growing or things could get very bad.'"