Some housing bubble news from Wall Street and Washington. CNN Money, "Embattled mortgage lender New Century Financial Corp. announced early Monday that all of its lenders are cutting off its financing, that it has been found in default of many of its financial agreements, and that it does not have the funds necessary to meet its obligations under current circumstances."

"The company's filings said that several of its lenders were now demanding New Century and its subsidiaries repurchase all outstanding mortgage loans, and that its other lenders now all have the right to make that demand. It said if each of the company's lenders make that demand, the aggregate repayment obligations would be approximately $8.4 billion."

"'The company and its subsidiaries do not have sufficient liquidity to satisfy their outstanding repurchase obligations under the company's existing financing arrangements,' said the company's filing."

"'We know they didn't get their $8 billion by holding a bake sale. We knew it would touch other financial institutions; now we'll see how,' said Art Hogan, chief market analyst at Jefferies & Co."

From MarketWatch. " New Century said it's been informed by Morgan Stanley of problems with a $265 million financing agreement. 'The company received a letter from Morgan Stanley notifying the company of certain purported defaults, accelerating certain obligations under the Morgan Stanley Agreement and stating that Morgan Stanley was discontinuing financing,' New Century said in a filing."

"The company also disclosed letters on financing agreements with Citigroup, Credit Suisse, Bank of America, Barclays, Goldman Sachs, and IXIS Real Estate Capital."

"New Century also said it doesn't expect to file its annual report prior to March 16 and that it could face delisting procedures under New York Stock Exchange rules, which allow an extension of up to six months for filing its financial report."

"'We think bankruptcy is likely,' UBS said in a note to clients Monday. 'If New Century gets temporary relief through a capital infusion, we believe it is only likely to delay, rather than solve its liquidity issues.'"

"Countrywide, one of the nation's largest mortgage lenders, said Monday that the volume of subprime loans it made in February fell as the company tightens lending standards in response to rising defaults."

"It said subprime loan fundings in February fell to $2.6 billion from $2.8 billion a year ago."

From Reuters. "Countrywide said it has low exposure to nonprime mortgages, but may still experience fluctuating earnings in the near term due to turmoil in the U.S. subprime market."

"Countrywide on Friday told its brokers to stop offering borrowers the option of taking out a mortgage without a down payment, according to a document obtained by Reuters."

"Countrywide said tighter lending policies lowered the percentage of nonprime loans it originated in February. 'In response to market factors, management has implemented changes to our origination policies to mitigate future exposure including further tightening of underwriting guideline,' the company said in a statement."

From theStreet.com. "'The nonprime lending industry is currently experiencing significant volatility and instability,' says David Sambol, Countrywide's president and COO. 'As a result, many nonprime competitors have recently exited the market and other lenders have suggested their continued viability is in question.'"

"'As a result of investor concerns about nonprime loan performance, yield requirements have increased and secondary market liquidity has been reduced,' Sambol says. 'These factors will adversely impact residual valuations and gains on sale of nonprime loans until market conditions improve.'"

"Countrywide's monthly purchase volume fell 7% to $13 billion in February. New home equity loans fell 13% to $3 billion."

The Orange County Register. "Is it too late for the federal government to fix the subprime problem? The crisis leads some experts to wonder why the government didn't act sooner."

"'That horse has left the barn,' said Jim Svinth, chief economist in the Irvine office of LendingTree. The Federal Reserve should have acted three years ago, he said."

"Indeed, last year, lenders issued about $600 billion in subprime loans, and many of those are going sour amid flat or falling home prices. At this point, Svinth said, it's doubtful new regulation is needed, although a discussion on the need for tighter loan underwriting is welcome."

"'I think the market is relatively self-regulating,' he said. 'You can see it right now. The subprime market is punishing itself.'"

"Freddie Mac, the No. 2 buyer of mortgages and a government-chartered company, said it would stop buying subprime loans fixed for just two or three years."

"Scott Simon, who heads the mortgage unit of Newport Beach's Pimco, said the move by Freddie has had little effect on the market for mortgage securities. Simon's also a believer that regulation would be superfluous: 'Most of the things people are talking about the market is already doing itself.'"

From Bloomberg. "More than a year after he stepped down as chairman of the Federal Reserve, Alan Greenspan is very much with us, handicapping recession risks (a one-third probability) for anyone willing to cough up a reported $150,000."

"No one seems to have appreciated the irony in his recent comments that 'imbalances' can build up after six years of expansion. The numero uno imbalance, a housing bubble that is rapidly deflating, went unmentioned by the maestro, which is interesting since his easy money policies were primarily to blame."

"Hold on to your assets. The deepest housing decline in 16 years is about to get worse."

"As many as 1.5 million more Americans may lose their homes, another 100,000 people in housing-related industries could be fired, and an estimated 100 additional subprime mortgage companies that lend money to people with bad or limited credit may go under, according to realtors, economists, analysts and a Federal Reserve governor."

"The spring buying season, when more than half of all U.S. home sales are made, has been so disappointing that the National Association of Home Builders in Washington now expects purchases to fall for the sixth consecutive quarter after it predicted a gain just last month."

"'The correction will last another year,' said economist Mark Zandi."

"Doug Duncan, chief economist of the Washington-based Mortgage Bankers Association, predicted in January that more than 100 home lenders may fail this year."

"The subprime crisis 'has taken the fuel out of the real estate market,' said Edward Leamer, director of the UCLA Anderson Forecast. 'The market needs new money in order to appreciate, and all of that money is gone for a very long time. The regulators are not going to allow it to happen again.'"

"Housing and related industries, which account for about 23 percent of the U.S. economy, fired about 100,000 workers last year. The total will be higher this year, according to Amal Bendimerad of Harvard University."

"'There has been an increase in unscrupulous individuals in the market,' said Arthur Prieston, chairman of a San Francisco-based company that investigates mortgage fraud. 'There's an unfair assumption of a connection between subprime failure and fraud. But there is a connection between early default and fraud.'"

"Some of that fraud involved speculators. They drove up prices during the boom by ordering new homes with the intent of selling them immediately after taking possession. That 'flipping' inflated demand and put the speculators in competition with the homebuilders, propelling the median U.S. home price to $276,000 last June from $177,000 in February 2001."

"'A lot of the housing bubble was speculation,' said Mike Inselmann of the research firm Metrostudy."