Some housing bubble news from Wall Street and Washington. The Dallas News, "Slower new-home sales in key Texas markets are adding to homebuilder D.R. Horton Inc.'s woes. 'We are struggling with softer markets in San Antonio and softer markets in Dallas-Fort Worth,' Horton CEO Donald Tomnitz said. 'San Antonio is much softer this year than it was last year.'"

"'In D-FW, there is a lot of press about foreclosures and defaults right now and that is adversely affecting future buyers,' Tomnitz said. New sales orders were down about 34 percent in Horton's region that includes Texas. But the builder faces its biggest hurdles out west. 'California is tough,' Mr. Tomnitz said."

"The company charged off an additional $67.3 million related to canceled land purchases and inventory write-downs. Almost half of the 26,000 houses Horton has under construction are speculative, with no buyer. And almost a third of the buyers Horton signs up never complete the sale, the company said."

"Mr. Tomnitz said the cancellation rate is likely to stay high as new homebuyers have a hard time selling their current house. Plus, some mortgage companies have made it harder to qualify for financing. 'We face strong headwinds, we believe, in the course of the next six to 12 months with illiquidity in the mortgage industry,' he said."

From Bloomberg. "H&R Block Inc., the largest U.S. tax preparer, said it found a buyer for its money-losing subprime mortgage unit after a six-month search, and will sell the business for about 40 percent less than it sought."

"'What matters most is that it's being sold,' said analyst Scott Schneeberger. 'Just to make it go away is what investors really want the company to do at this point.'"

The Associated Press. "Opteum Inc., a real estate investment trust and mortgage lender, on Friday said it plans to exit its money-losing wholesale mortgage loan origination business."

"Opteum said it has put the business on the block due to a deteriorating secondary market for closed mortgage loans and ongoing weakness in demand for mortgage products and services in a soft housing market."

"'In the last month or so, however, the secondary market for mortgage loans has experienced significant distress and substantially increased volatility that was initially precipitated by lax underwriting standards, early payment defaults and high delinquency rates involving subprime mortgages and concerns over the general state of the U.S. housing market,' said CEO Jeffrey J. Zimmer."

"Shares of First Horizon National Corp. sank Thursday after the bank said it lost money on mortgage lending because of more payment defaults and weaker demand for home loans from investors."

"The culprit was bad credit, which led to losses in the bank's mortgage business. The bank is writing off more loans as borrowers miss payments. The bank said the investors who buy mortgage loans in the secondary market have soured on home loans backed by bad credit. This squeezes profit margins because banks collect lower prices for loans."

"First Horizon said it will stop making 'subprime' loans to people with bad credit."

"GMAC LLC's Residential Capital home- lending unit and General Electric Co.'s WMC Mortgage division announced more than 1,400 job reductions as losses mount in the U.S. subprime loan industry."

"'The subprime mortgage market is going to shrink by 75 percent in terms of jobs and volumes of origination,' said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California at Berkeley. 'These companies got too big. They were giving people loans they shouldn't have and now they're getting rid of all that.'"

"Spokeswoman Gina Proia said the cuts were made because of 'current market conditions and the deterioration of the U.S. mortgage market.'"

The Star Tribune. "'Because the U.S. mortgage market continues to underperform, we regret to have to announce additional layoffs,' COO Jim Jones wrote in a memo to employees.The layoffs come one day after the company said that CEO Bruce Paradis will retire in June."

"Last month, the company said it lost $651 million in the fourth quarter, compared with a profit of $118 million during the same period a year ago. 'ResCap did not move quickly enough to reduce exposure in the face of this downturn,' Paradis recently told investors."

"Company executives and analysts warn that the subprime market will deteriorate further this year. Interest rates on more than 10,000 of the company's subprime adjustable-rate mortgages will reset by the end of the year, with many borrowers seeing their monthly payments jump by more than 30 percent, which likely will lead to more defaults."

"A Hennepin County judge has granted class-action status to a lawsuit that accuses subprime lender Ameriquest Mortgage Co. of abusive and fraudulent lending practices."

"'The problems we have seen in the subprime market are exemplified by Ameriquest,' Rudd said. 'The rush to write as many loans as possible regardless [of whether consumers] were able to satisfy their obligations.'"

"Plaintiffs Luke and Tracy Ricci were seeking to consolidate debt by refinancing their mortgage. The couple allege that Ameriquest inflated the appraisal on their home and failed to disclose that their loan had an adjustable rate and several prepayment penalties and fees."

From Ken Harney. "Have inflated appraisals helped fuel the current surge in foreclosures by credit-strapped borrowers? Are they at the core of many mortgage fraud schemes? The four largest trade groups representing appraisers say yes, and they are asking federal financial regulators to crack down."

"(Appraiser) Gary Crabtree in Bakersfield, Calif., documented the practice recently for the FBI and state financial and real estate regulators. The basic scenario, said Crabtree, involves realty agents who have listed houses that aren't selling."

"To move the properties, they entice buyers, or friends, to 'submit an offer [for the home] that is $30,000 to $100,000 above the current list price,' with the promise that they'll get substantial cash at closing."

From Bankrate.com. "On April 17, the House Financial Services Committee held a hearing called, 'Possible responses to rising mortgage foreclosures.' Of a dozen witnesses, none were mortgage servicers, the people whose companies collect mortgage payments, deal with delinquent debtors and initiate foreclosures. The committee didn’t call any lenders, either."

"David Berenbaum, executive VP of the National Community Reinvestment Coalition, suggested a...mandated temporary halt in foreclosures."

"A mortgage servicer might have responded by asking who would pay the accumulated interest payments during a moratorium. The servicer, the investors who own the loan, the borrower? If it’s the latter, is that fair? Or would the taxpayers pick up the tab?"

"George Miller, executive director of the American Securitization Forum, warned that 'policies designed to further regulate subprime lending or provide relief to borrowers' could cause investors 'to shun the market altogether and cut off mortgage credit for worthy subprime borrowers.'"

From Reuters. "Citigroup Inc. CEO Chuck Prince said Thursday some subprime lenders flooded communities with inappropriate mortgage products, skirting what he described as a 'patchwork' of regulation.

"Prince, the head of the world's largest bank, didn't name any names but said some mortgage lenders took advantage of light regulation."

"'People find out how to game the system to get capital through the least possible regulatory oversight,' Prince said. 'When that happens, bad people do things to harm our community. ... Very exotic, aggressive mortgage products were pumped into communities where they are not appropriate.'"