Some housing bubble news from Wall Street and Washington. "More evidence of a continued housing market slump arrived Thursday morning, when Bensalem-based Orleans Homebuilders Inc. reported a loss of $51.9 million for the quarter ending March 31. Revenue fell 38 percent from last year's third quarter."

"'Although we did experience some strengthening in new orders through February, March did fall short of our expectations and the trend has continued into April, where our new orders were also disappointing,' CEO Jeffrey P. Orleans said."

"The loss was blamed on abandoned project write-offs and other conditions. Chief accounting officer Jim Thompson added profit margins narrowed because Orleans used sales incentives to drive new home orders."

"'We took $47.3 million in charges against inventory, which was substantially against land,' added Michael T. Vesey, Orleans' chief operating officer. 'We also took a pre-tax charge of $10.7 million for abandoned projects, representing the write-off of about 1,300 lots.'"

"Avatar Holdings Inc. today reported...the dollar volume of housing contracts signed during the first quarter of 2007 declined by 76% compared to the first quarter of 2006. The number of contracts signed declined by 67%, compared to the first quarter of 2006."

"The decline in contracts signed for the first quarter of 2007 compared to the first quarter of 2006 reflects the accelerated weakening of the market for new residences in the geographic areas where our developments are located. Avatar Holdings Inc. is primarily engaged in real estate operations in Florida and Arizona."

"A significant deterioration in our markets continues. The number of investor-owned units for sale, the current tightening of mortgage underwriting standards, the availability of significant discounts and incentives, the difficulty of potential purchasers in selling their existing homes and the significant amount of standing inventory continue to adversely affect both the number of homes we have been able to sell and the prices at which we are able to sell them."

The Dallas News. "One of North Texas' top 20 homebuilders has sold out to a fast-growing competitor. Newmark Homes, which started more than 600 houses with its affiliates in the Dallas-Fort Worth area last year, is selling most of its D-FW assets to Arlington-based Wall Homes."

"The acquisition was made at a substantial discount, company founder Steve Wall said. Newmark's parent company said the sale of the D-FW assets is expected to generate a pre-tax loss of $11.7 million."

"The purchase could signal the start of a contraction in the homebuilding business at a time when sales are slumping. 'We are at the beginning of a lot of changes in this building market right now,' said Dallas housing analyst Ted Wilson. 'There will probably be more consolidations.'"

The Journal Now. "Home builder Centex Corp. said yesterday that it is cutting jobs in the Triad as it restructures its work force in the area. Centex does not plan to make additional investments in the market at this time, said Eric Bruner, a spokesman for the company."

The Associated Press. "Pope & Talbot Inc., a maker of lumber products, said Thursday its first-quarter loss more than doubled as lumber prices fell sharply in response to the U.S. housing slump."

From Reuters. "Impac Mortgage Holdings Inc., a specialist in mortgages whose risk levels rank between prime and subprime loans, reported a first-quarter loss, hurt by a mark-to-market loss in the fair value of derivatives. The Irvine, California-based company posted a net loss of $121.7 million."

"NovaStar Financial Inc. said Thursday its first-quarter earnings doubled, but the residential mortgage lender posted a loss excluding an accounting gain related to a change in its corporate structure."

"Stripping out the one-time gain, the company lost $39.8 million. The company made the move anticipating accounting issues related to a sharp increase in mortgage defaults and foreclosures among customers with poor credit that will reduce taxable income in the next five years."

The Financial Times. "American International Group on Thursday said it expected to face costs of $128m linked to subprime mortgages in the first indication of the price US federal banking regulators could extract from the industry for past aggressive lending practices."

"AIG has not been one of the biggest subprime lenders and has steered clear of the most aggressive mortgages, which suggests the hit for the industry leaders could be much larger."

"Banks are taking more risks with their property lending so buyers of European and U.S. commercial mortgage-backed securities should beware, even though property markets are healthy, Moody's Investor Service said."

"In the U.S. market's five worst-performing years, 31 percent of CMBS issues with 70-80 percent loan-to-value ratios experienced credit events such as defaults or restructurings, Tad Philipp, a managing director of Moody's in the United States, said."

"It was fanciful to expect the continuation of sub-1 percent delinquency rates and annual real estate capital growth of 10 percent, he said. 'We're not going back to reckless construction but we do have to be careful about how we look at the last 10 years,' he said, explaining Moody's preemptive decision this month to tighten up its ratings criteria to give bond holders extra protection."

"Philipp said it was 'better to get a flu jab when the body was healthy' but cited growing signs of lax lending in the United States. Among these was a rise in loan-to-value ratios to more than 110 percent from just over 90 percent in 2003 and a growing share of interest-only lending."

"'There is a growing difference between underwriters' and Moody's measure of value,' Philipp said."

From Bloomberg. "Former Federal Reserve chairman Alan Greenspan said he sees a 2-to-1 chance that the U.S. will avoid a recession even as the economy slows. 'At the moment, I still say as I said before, by algebraic implications, the odds are 2 to 1 we won't have a recession,' Greenspan said today, according to a recording of his comments."

"'There is no doubt there is a slowdown going on in the U.S.,' Greenspan said. 'We are clearly having troubles in the capital investment area, as well as potentially in the consumption area and obviously housing being a significant drag.'"

The Chicago Tribune. "Consumers are spent. Retail sales tumbled a record 2.4 percent in April from a year earlier, according to the International Council of Shopping Centers' preliminary tally of 53 retail chain stores; the worst performance since the trade group began tracking sales in 1970."

"'We expected a slowdown in 2007 but not to the degree we're seeing,' said Michael Niemira, the group's chief economist in New York. 'Anything that is home-related is really hurting.'"

"'With the direction it's going, I'm not sure there's any immediate light at the end of the tunnel,' said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates in Atlanta. 'It's going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.'"

"The crisis that has swept the U.S. subprime mortgage industry may come down to a simple, three-digit number, multiplied by millions. Lenders in the midst of an unprecedented U.S. housing boom pared borrowing requirements to a minimum, a single number, known as a 'FICO score,' that was supposed to reflect the borrower's ability to repay a mortgage."

"A credit score and a written, unchecked statement of income have often been enough to get a loan. 'The combination killed the goose,' said Bill Dallas, CEO of Ownit Mortgage Solutions, a failed subprime lender."

"Boosting scores has become a booming industry. Deborah Vasile, a Cape Coral, Florida, mortgage processor who went through a recent business bankruptcy, said her credit score rose more than 100 points after she paid about $500 to Credit Repair Today of Tampa, Florida."

"Elizabeth Warren, a professor at Harvard Law School, said she questions how an entire industry can be based on claims of quick fixes for a person's creditworthiness. 'If credit repair can help someone alter a FICO score for people that can pay a fee, doesn't that say that a FICO score is not a very reliable indication of a person's financial status?' she said."

"Lenders today might take a lesson from failed underwriters that may have ignored the details at their own peril. Executives from mortgage lender New Century Financial Corp. cited FICO scores to demonstrate the quality of their mortgage loan portfolio."

"On May 4, 2006, for example, New Century told investors and analysts its average FICO score was 633 at the end of the first quarter of 2006, up from 600 in 2003. 'Credit performance is better than historical experience and has exceeded our expectations,' the company's slide presentation said."

"Eleven months later, New Century filed for bankruptcy protection."