Some housing bubble news from Wall Street and Washington. "Mortgage lender SouthStar Funding has closed its doors, the latest victim in the battered subprime lending market, a company executive said Tuesday. 'We really felt like we could weather the storm and that we would outlive some of the competition,' said Tyler Wood, SouthStar executive VP. 'Wall Street's appetite for the Alt-A and subprime market disappeared.'"

The Post and Courier. "SouthStar, which once employed about 800 people nationwide and last year generated $6.3 billion in mortgage loans, closed its entire operation. 'SouthStar Funding LLC sincerely regrets that it was necessary to cease its mortgage lending operations,' the mortgage firm said. 'The recent unprecedented downturn and policy changes in the mortgage industry necessitated this action.'"

The Boston Globe. "New York mortgage broker Vertical Lend Inc. forged borrowers' signatures, created false loan records, and charged fees that were never disclosed to customers, state regulators said yesterday as they ordered the company to stop selling mortgages in Massachusetts."

"Also yesterday, Massachusetts ordered SouthStar Funding LLC to halt operations after regulators learned the company is no longer funding some loans it had agreed to make, said David Cotney, the banking division's chief operating officer."

"'The chickens are coming home to roost,' said James Campen, a former economics professor at the University of Massachusetts at Boston."

The Boston Herald. "Subprime mortgage lenders are bulking up on 'loss mitigation' personnel in a desperate attempt to avoid foreclosing on homes now worth far less than what borrowers paid for them. The moves aren’t done for altruistic reasons: Lenders simply don’t want to foreclose on homes that will end up on their books."

"Analyst Gerard Cassidy said he eventually sees other lenders, not just subprime lenders, moving toward hiring extra 'loss mitigation' personnel if the housing carnage starts spreading to other areas of the financial sector."

United Press International. "The troubled U.S. housing market has led to nearly the same job-cut number so far this year as in all of 2006, an outplacement consulting firm said Wednesday."

"Job cuts in the housing-related industries of real estate, construction and mortgage lending surged 346 percent to 21,245 in the first quarter from 4,764 in 2006's three months, Challenger, Gray & Christmas Inc. said."

"'While many have predicted that the housing market has hit bottom, the situation seems only to worsen as home builders continue to report slumping orders,' says said John Challenger, CEO of Challenger, Gray & Christmas."

"'Now we are seeing the impact hit traditional as well as sub-prime mortgage lenders as demand for loans declines and the number of foreclosures skyrockets,' he says."

The Associated Press. "Mortgage giant Fannie Mae, remaking itself as it recovers from a multibillion-dollar accounting scandal, is cutting its 6,500-person work force by several hundred employees by year's end."

"Fannie Mae also disclosed in February its decision to withhold $44.4 million in bonus money tied to company earnings targets from 46 current and former senior executives after a government-ordered review found they were undeserved on the basis of performance."

The Chicago Tribune. "Amid rising levels of defaults and foreclosures in the home-lending industry, nearly 900 Chicago-area workers at four mortgage firms will lose their jobs, according to recent filings with Illinois employment officials."

"ACC Capital Holdings told the Illinois Department of Commerce and Economic Opportunity in three separate filings last month that it is cutting a total of 515 jobs at three locations."

"Meanwhile, Fremont Investment & Loan told the state that it was laying off 270 workers. H&R Block Mortgage Corp. is cutting 58 workers. In addition, WMC-GEMB Mortgage Corp. told the state that it is letting go 51 workers in Schaumburg as a result of 'the current climate' in the subprime mortgage industry, a spokeswoman said."

From Reuters. "Mortgage applications fell for the third straight week as interest rates rose, reinforcing a growing view that the housing industry will further sour as fewer subprime borrowers get loan approvals."

"'We definitely still think we have some ways to go before we reach bottom in terms of housing activity,' said Andrew Tilton, senior economist at Goldman Sachs. 'You're going to have a combination of more supply and less demand going forward as result of happenings in the subprime market adding to a situation that is already one of oversupply,' Tilton said."

"On Tuesday, the National Association of Realtors reported a 0.7 percent bounce in pending sales of existing U.S. homes, suggesting stabilization. 'Even a stabilization in sales will do little to work off quickly the high level of inventories of homes for sale, which in turn means further downward pressure on prices,' UBS said in a report."

From Builder Online. "Credit Suisse analyst Ivy L. Zelman says possible lender restrictions involving subprime and Alt-A mortgages, which accounted for an estimated 40 percent of purchase dollar originations in 2006, may result in a shrinking pool of buyers for new homes."

"'Some of the investors said, 'I'm delivering the loan back to you. Give me my money.' And that's basically why New Century went belly up,' Zelman explained. 'What people think right now is that this is just a subprime problem, and unfortunately, I wish it was. Subprime is not that significant for many (builders) but we all should realize that housing is a food chain, and there is a domino effect.'"

From Bloomberg. "Some collateralized debt obligations that invest in subprime mortgage bonds, related derivatives and other CDOs may be less diversified than they appear, raising investors' risks, according to Moody's Investors Service."

"Moody's sees 'increasing' correlations in performance, which suggests it will require more protection for bondholders when the project is finished."

"The value of Canadian building permits plunged from record highs to their lowest level in a year in February. Statistics Canada reported on Wednesday a 22.4 percent tumble in permits due to a sharp decline in both residential and nonresidential permits."

"The biggest decline was in the province of Ontario but western Canadian provinces of Alberta and British Columbia, as well as Quebec in the central region also saw significant setbacks."

"'The hefty retreat does support the view that housing activity will moderate in the year ahead,' said economist Doug Porter."

From CTV.ca. "'February's decline, the fastest in 13 months, occurred due to across-the-board decreases in both residential and non-residential sectors,' Statistics Canada reported. 'Inventory of unsold new housing has been on the rise since August 2006.'"

"The vacancy rate for U.S. apartments climbed to 6 percent in the first quarter, the highest in almost two years, as the number of available properties increased, real estate research firm Reis Inc. said."

"The decline in prices for condominiums, combined with the large number of condos that are available for rent, has made them less attractive to investors, the study said."

"Net conversions peaked at more than 55,000 units in the third quarter of 2005 and now stand at less than 1,000 units, according to Reis. In Fort Lauderdale, Phoenix, Las Vegas, Atlanta, Austin, and Fort Worth, the slowdown in conversions has turned to net re-conversions, Reis said."