Some housing bubble reports from Wall Street and Washington. "The National Association of Realtors reported Friday that price of a median home sold last month dropped to $212,800, down by 1.3 percent from the same month in 2006. It marked a record seven straight months that the median home prime has fallen compared to the same period a year ago."

"Total existing home sales are 3.6 percent below the 6.94 million-unit pace in February 2006."

From Reuters. "Freddie Mac, the No. 2 U.S. mortgage finance company, reported a $480 million net loss for the fourth quarter of 2006, the company said Friday."

"For all of 2006, Freddie's mortgage guarantee business grew 10.6 percent to about $1.5 trillion, the company said. That growth came despite a 'challenging year for housing and mortgage finance,' said Richard Syron, the company's chief executive."

"Freddie Mac and Fannie Mae were created by Congress to pump money into the $8 trillion home-mortgage market by buying home loans from banks and other lenders and bundling them into securities for sale on Wall Street."

"Countrywide's subprime mortgage defaults for 2006 loans may exceed the company's highest on record, a company executive told a government panel examining mortgage lending."

"'We believe that declining home prices and other factors ... may produce foreclosures numbers on 2006 originations approaching or exceeding those on loans originated in 2000,' Sandor Samuels, the company's executive managing director said in remarks."

"Samuels urged Congress not to 'lose sight of the reality that more than 90 percent of Countrywide's subprime borrowers will not lose their homes to foreclosure.'"

"Samuels also warned lawmakers not to create overly tight restrictions on high-risk mortgages, saying that could lock out many would-be homebuyers."

"H&R Block Inc. said its Option One subprime mortgage unit renewed a credit line with Bank of America Corp. for a year, but the size was cut in half."

"H&R said last week it has written down the value of the subprime lender's assets by $29.2 million before taxes, because of the 'extreme volatility in the mortgage market,' according to H&R Block CEO Mark Ernst."

The New York Times. "The rise and fall of the subprime market has been told as a story of a flood of Wall Street money and the desire of Americans desperate to be part of a housing boom. But it was the little-noticed tool of automated underwriting software that made that boom possible."

"Subprime lenders like automated underwriting because it is cheap and fast. 'You don’t have to chase every lead — just greenlight ’em,' Edward N.. Jones of Arc Systems said in an interview."

The Globe & Mail. "Members of Congress are pointing angry fingers at Alan Greenspan and other U.S. bank regulators for fostering a mortgage market 'on steroids' and failing to thwart a predictable subprime meltdown."

"Witnesses said the real villains in the subprime meltdown aren't regulators, lenders or consumers, but Wall Street, which had an insatiable appetite for mortgage-backed bonds. 'The real market demand for bond services is on Wall Street,' explained Irv Ackelsberg, a Philadelphia real estate lawyer and consumer advocate. 'That's the real market and the real culprit.'"

"North Carolina bank commissioner Joseph Smith told the hearing that lending standards lapsed because of a 'fee-driven, volume machine' that pushed mortgage brokers to sell mortgages to people who they knew could not afford them. 'The animal instinct took control,' he said."

The Washington Post. "A top Fed officer defended the agency but acknowledged it could have stepped in earlier to curb risky lending. 'Given what we know now, yes, we could have done more sooner,' Roger Cole, the Fed's director of banking supervision and regulation, told the committee."

"Greenspan, in an interview later in the day, declined comment on whether the Fed was a lax regulator. But he disputed the senators' other allegations that he encouraged homebuyers to take on nontraditional mortgages."

"At one point, committee Chairman Christopher Dodd, held up three large blue charts that demonstrated the Fed was aware as far back as 2003 that lending standards were deteriorating."

"About the same time, Dodd said, Greenspan was touting adjustable-rate loans. 'American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgages,' Dodd quoted Greenspan in a speech in early 2004."

"Greenspan noted Thursday that he retreated from those remarks about two weeks after he made them, saying he meant only 'a narrow segment' of households might benefit from nontraditional mortgages."

"Greenspan also took issue with Dodd's criticism. 'To suggest the Fed was pushing subprime mortgages or even adjustable-rate mortgages is just not accurate,' he said. 'I was merely identifying an arithmetically obvious issue, that some mortgage borrowers, admittedly a very small segment, would do better with a different product.'"

"In June 2004, the Fed embarked on a two-year campaign of raising short-term rates to tame inflation. But Dodd said it also hit homeowners who had loans with adjustable rates. While interest rates were going up and questionable lending practices were spreading, federal banking regulators were not 'protecting hardworking Americans from unscrupulous financial actors,' he said."

"'In my view, these actions set the conditions for the perfect storm that is sweeping over millions of American homeowners today,' said Dodd."

"The expansion of the lending industry was part of a nationwide push for homeownership. Now the real-estate boom is unraveling, with about $160 billion in mortgages falling into delinquency, regulators said at Thursday's hearing."

The News & Observer. "The city of Charlotte does not count foreclosures. Neither does Mecklenburg County, the state of North Carolina or the federal government. Even the Federal Housing Administration, which insured many of the failed loans, didn't track the concentrations."

"About 8,700 homes have foreclosed in Mecklenburg County over the past four years. An Observer study found almost 30 percent of the foreclosures in 2003 and 2004 were associated with loans insured by the federal government."

"The share of Americans who own homes rose to almost 69 percent last year from 65 percent in 1996. The FHA was responsible for a share of the increase. So were subprime lenders, which make loans with high interest rates to the same people traditionally served by the FHA."

"But now the number of foreclosures also is pushing into record territory, driven by defaults on FHA and subprime loans, according to estimates made by the lending industry."

"'The mortgage industry has said they have increased home ownership,' HUD's inspector general, Kenneth Donohue, told a U.S. House committee last week. 'However, at what cost to the American people?'"