Some housing bubble reports from Wall Street and Washington. "Builders broke ground on new homes at an annual rate of 1.518 million last month, an increase of 0.8 percent from February, the Commerce Department said today in Washington. Building permits, a sign of future construction, also rose 0.8 percent. The increase in housing starts was led by a 45 percent jump in the Midwest. Starts fell 7.7 percent in the West, 6.1 percent in the Northeast and 2.7 percent in the South."

From MarketWatch. "Housing starts are down 23% from March 2006, while permits are off 26%. On Monday, the National Association of Home Builders reported that builder optimism sank in April, with builders warning that tighter lending standards for subprime loans could prolong the slump through 2008."

From Reuters. "Completions of new homes fell 0.7% to a seasonally adjusted annual rate of 1.63 million. It's the lowest number of completions since August 2003. It takes about 6 months for a home to go from groundbreaking to completion."

"There were 1.2 million homes under construction in March, down 16% from the previous March."

The Associated Press. "Like other banks, Wells Fargo saw some signs of worsening consumer credit and reported that net charge-offs and nonperforming assets rose in the January-March period from a year earlier."

"The bank said that net charge-offs as a percentage of loans rose to 0.9 percent in the first quarter from 0.56 percent a year earlier. Nonperforming assets were 0.82 percent in the first quarter, up from 0.6 percent a year earlier and up a bit from the fourth quarter."

"The bank's first quarter credit losses were $715 million, up significantly from $533 million a year earlier, the earnings report said. Nonperforming assets were $2.67 billion at the end of the quarter, up from $1.85 billion a year earlier."

"And Wells Fargo estimated that deterioration in the subprime mortgage market reduced first-quarter revenue by approximately $90 million before taxes."

"On Monday, Citigroup Inc. and Wachovia Corp. increased their provisions for loan losses in the first quarter. Both also held down the growth of expenses, a typical strategy in a weakening credit environment."

From Reuters. "Wells Fargo isn't likely to buy another mortgage lender as the market for subprime loans goes through an 'adjustment,' and is probably adding market share as weaker lenders pull back, CFO Howard Atkins said on Tuesday."

"Washington Mutual Inc. topped the list of mortgage lenders in the percentage of loans it gave to investors or second-home buyers, the Wall Street Journal reported on its Web site on Tuesday."

"The Journal also said that Citigroup and WaMu had the highest concentrations of loans with high interest rates, which are generally subprime mortgages."

The Seattle Times. "The high-credit-risk market known as 'subprime' represented 9 percent of WaMu's overall loan portfolio at the end of 2006. Analysts who follow the company predict first-quarter profit will suffer as a result."

"'Some of what they did is going to come back to haunt them,' said Stuart Plesser, an equity analyst with Standard & Poor's."

"WaMu, which employs more than 5,000 in downtown Seattle, had $21 billion in subprime mortgages at the end of last year. The volume of its subprime loans made in the fourth quarter dropped 41 percent from a year earlier, but the company still ranked among the 10 most active subprime lenders, according to National Mortgage News."

"WaMu last year determined it would not be able to collect on $140 million worth of subprime loans, up from $50 million in 2005. The company reported its home-loan group lost $122 million in the fourth quarter. 'The subprime business already is hurting their profits and will continue to do so for the next two or three quarters,' analyst Fred Cannon said."

"WaMu and other lenders often packaged subprime loans into mortgage-backed bonds sold to investors. Among 20 issues in the closely watched ABX-HE 06-2 index of subprime loan bonds, a WaMu bond had the worst delinquency rate, said mortgage analyst Matthew Howlett."

"About 23 percent of subprime loans supporting the bond issue were delinquent for 60 days or more in March. 'Their reputation is not the best in the business,' Howlett said of WaMu. 'They're a little aggressive.'"

"Plesser said he believes WaMu will have to set aside more money as losses mount. 'When first-quarter earnings come out, people will focus on delinquencies and might be alarmed at how high they are.' he said."

The Columbus Dispatch. "JPMorgan Chase is drawing attention for the number of its mortgage loans that end up in foreclosure. Chase accounted for 4.1 percent of Franklin County mortgages but 8.4 percent of foreclosure filings and 10 percent of sheriff sales on foreclosed properties in 2006."

"Chase's foreclosure numbers may be the result of being the new player in Franklin County. Chase entered central Ohio in 2004, when it acquired Bank One."

"When a bank comes into a region, it often has to buy its way into the market, said Ken Mayland, president of ClearView Economics. 'That means doing the kind of business that other (banks) may not be doing,' Mayland said."

"M&T Bank Corp. on Tuesday said first-quarter profit fell 13 percent, hurt by weak demand for mortgages. The company said it had received low bids on some mortgages it tried to sell and that rising defaults had forced it to buy back some loans it had sold."

"Fee income fell 7 percent to $236.5 million, including a 60 percent decline from mortgage banking. M&T set aside $27 million for bad loans, up 50 percent, while net charge-offs held steady at $17 million. Nonperforming loans nearly doubled to $273 million from $143 million."

From Bloomberg. "SunTrust Banks Inc., the seventh- largest U.S. bank by assets, said first-quarter profit fell 1.9 percent as problem loans increased and mortgage lending slowed."

"SunTrust said its nonperforming loans rose to 0.57 percent of total loans, up from 0.25 percent a year earlier, in part because of deteriorating credit quality in the Alt-A loan portfolio. Net charge-offs rose to $62.9 million from $22.3 million."

"The mortgage investments that helped fuel a recent U.S. housing boom now have many troubled borrowers trapped in loans that they cannot afford, a top bank regulator will tell Congress in a hearing on Tuesday."

"While mortgage investments added liquidity to the market in recent years this also has put dangerous distance between the lender and borrower, Sheila Bair, chairman of the Federal Deposit Insurance Corporation, is due to tell a Congressional hearing."

"'Significant changes in the subprime mortgage market in recent years have substantially altered the relationship between borrowers and lenders,' Bair said. 'In some cases, this makes it more difficult to resolve troubled loans in a way that preserves the availability of credit and benefits deserving borrowers, namely, by keeping them in their homes.'"

"On Monday, Bair hosted a subprime summit with consumer groups, regulators and representatives from the mortgage industry. Several participants in the meeting said that subprime mortgages are bundled in such complex investments that it will be difficult to help borrowers who face foreclosure."

"Losses are showing up in subprime mortgage bonds earlier than expected as the home foreclosure process becomes speedier, according to one research firm."

"Investors with exposure to the riskiest asset-backed securities had expected to see some losses as a result of the problems with subprime loans underwritten in 2006, but many reckoned the red ink would start flowing much later as foreclosures can take up to two years to complete."

"'When you look at 2006 (subprime) collateral there are losses,' said Michael Bykhovsky, president of Applied Financial Technology."

"In at least some subprime bond deals, there are losses when loans backing the deals are just eight months old. The loss rates of around 0.5 percent are about triple what he'd normally expect from a loan that age."

"One explanation, Bykhovsky said, is that banks in charge of collecting mortgage payments and responsible for handling foreclosure and sale of the properties in question are 'just clamping down and processing and liquidating' properties whose loans enter into delinquency and default, he said."

"While in a rising home price environment waiting an extra month or two can actually work in a bank's favor, Bykhovsky said, in the current environment, 'if you have less of a chance of recovery you have to move very quickly.'"

"Net international buying of U.S. long-term securities slowed in February from the previous month. Purchases of agency debt slowed, dropping to a net $2 billion in February from a net $35.8 billion the previous month. The securities are issued by agencies including Fannie Mae and Freddie Mac."

"'The subprime story still has some legs,' said Mike Englund, chief economist at Action Economics LLC. 'The people who were concerned in February still think the market could get blindsided at any time.'"