Some housing bubble news from Wall Street and Washington. The Orange County Register, "Michael Perry, CEO of IndyMac Bancorp, is stubborn when it comes to delinquent loans. He refuses to ditch them, even as they expand rapidly on the books of Pasadena-based IndyMac, which...is the largest U.S. lender in a credit category dubbed 'Alt-A,' which is one level above the risky subprime niche."

"During an April 26 conference call with analysts, Perry said the company didn't sell a single dud loan in the first three months of the year because no one wanted to pay what he thinks they're worth. No way is IndyMac selling to a hedge fund for 'pennies on the dollar,' Perry said."

"In that time, IndyMac's sour loans and foreclosed real estate ballooned 75 percent to $324 million. 'We are not going to fire-sell when we have the intent and ability and expertise to work through those loans and sell them ourselves,' he said."

"The same problems shaking up the subprime market are now emerging in the Alt-A industry."

"'The most creative mortgage products came out of the Alt-A business,' said Manuel Ramirez, an analyst with Keefe Bruyette & Woods in San Francisco. Last year, 20 percent of home purchase loans were Alt-A, up from 5 percent in 2002, according to a March 12 report by Credit Suisse."

"Ramirez said it's 'eerie' how the subprime correction appears to be repeating in Alt-A. 'Compared to subprime it's at a snail's pace but I think it's real,' Ramirez said."

From Inman News. "LendingTree laid off about 440 workers Friday as a cost-cutting response to falling revenue and loan production."

"'There has been significant lender pullback or outright exit from certain segments of the mortgage lending market, particularly from the highest-margin products,' the company reported. 'As a result, LendingTree's business, at both the exchange and at LendingTree Loans, is currently focused on conforming loan products, which are the most competitive from a lender's perspective and hence the lowest margin for LendingTree.'"

"A spokeswoman for the company, Rebecca Anderson, told Inman News that loan-request volume was up 17 percent in the first quarter compared to last year, but 'problems in the subprime market are causing spillover effects,' including reduced margins on loans and fewer orders transmitted to exchange lenders."

The Wall Street Journal. "Anderson said the company needs to get costs in line 'with the current realities in the market.'"

"Mortgage lending has declined in recent months as lenders tighten standards amid a surge in defaults. Ms. Anderson said lenders are turning down more loans, and that has squeezed profit margins at LendingTree."

National Mortgage News. "Fannie Mae plans to tighten its underwriting guidelines on certain loans especially where risk layering is involved. A spokesman confirmed to National Mortgage News that changes are coming in regard to high loan-to-value ratio mortgages and 'very low' downpayment loans."

"Meanwhile, the Department of Housing and Urban Development wants to ban all downpayment 'gift' assistance provided to homebuyers by sellers and in some instances nonprofits working with sellers. The ban would apply only to mortgages insured by the government."

"HUD's proposed rule threatens dozens of nonprofit groups, including Nehemiah Corp. of Sacramento, Calif., that have doled out hundreds of millions of dollars of payment assistance to mostly low-income home buyers across the country."

"Such groups have been controversial because many provide down-payment gifts to buyers and are then reimbursed by individual home sellers and home builders. Critics say some builders have included the cost of the gift into the price of the house, which inflates values. Critics also say these gifts lead to higher than normal foreclosure rates."

"Supporters say down-payment gifts have served low-income home buyers better than subprime mortgages, which have even higher default rates. Scott Syphax, Nehemiah's CEO, says the HUD rule could further crimp the ability of low-income buyers to afford a home using FHA loans."

"'At the very time that the collapse of subprime is killing access to the American dream, the one program that is a lifeline for working families is marching to the front of line to shut the last open door,' Mr. Syphax said."

The Financial Times. "Eurozone demand for house loans has dropped sharply, supporting the European Central Bank's view that property markets are cooling, so far in an orderly manner."

"Demand for housing loans to households 'fell significantly' in the first three months of this year, the ECB reported. It said that the decline was driven mainly 'by a sharp deterioration in the assessment of housing market prospects.'"

"The survey showed a much larger number of banks reporting declining demand for house loans than reported increases, and that the difference was the largest since the survey began in 2003."

The New York Post. "The housing market has not hit bottom yet and probably won't until sometime in 2008. According to data gathered by the FDIC from the end of 2001 to the end of 2006: Loans secured by real estate are up 76 percent to $4.51 trillion. Residential mortgages for one- to four-family homes jumped 57.7 percent to $2.18 trillion. Home-equity loans are up 203.4 percent to $559 billion."

"And, no surprise, foreclosures are up too. National foreclosure filings were up 47 percent last month from a year ago to 149,150, according to RealtyTrac."

"The bigger problem is that the price of a home must ultimately correlate to what individuals can afford, notes Mark Grinis, a partner in Ernst & Young's real estate, hospitality and construction group. 'If prices advance significantly ahead of wages, over time there will be a price correction.'"

"And clearly, our wages have not kept up with the inflated housing prices, so we're due for a fall. 'The typical cycle is about four years, and we're only a year and a half in,' notes Grinis. 'It will be late '08 before the dust settles and you can call a bottom.'"

From MarketWatch. "A spring home-selling season that's looking like a bust and pressure from growing inventories of houses in the resale market should intensify home-price declines in the second half of 2007, Wall Street analysts say."

"'We think the housing downturn has decisively moved to its second act of falling prices,' wrote Deutsche Bank in a report to clients Monday."

"'With the first act consisting of significant retrenchments in volumes, the second act is one with home prices falling back to more equilibrium levels after a period of breathtaking increases during the housing boom,' Deutsche Bank said."

"The analysts...think prices in the resale market 'may begin to retreat in the second half of the year, as existing-home owners face a second [disappointing] spring season and as competition from a surge of resale listings increases.'"

"As existing home sellers throw in the towel, that could put more pressure on the builders of new homes to match the lower prices and remain competitive. Additionally, resale listings have risen 'dramatically during the spring selling season' which could further pressure prices, Deutsche Bank said."

From Bankrate.com. "Fact or fiction: The media decide whether you buy or sell a home."

"Sounds ridiculous, even insulting. But many real estate professionals insist there is a psychological component to buying a house, and that a lot of negative publicity about the housing market can have an effect on whether consumers will buy, sell or sit."

"Many blame the media for the slowdown that hit the housing market in 2006. 'What happened to us is the media,' says Ellen Renish, regional vice president for the National Association of Realtors."

"Stories about a real-estate 'bubble' and its potential to burst caused consumers to 'not do anything,' she says. 'And nothing happened. The bubble stories really stopped things for three months,' Renish says. 'It was pretty scary.'"

"When it comes to sales, the biggest factor is 'the local economy,' says Dick Gaylord, president-elect of the NAR. 'But I can tell you that almost every buyer I talk to today thinks they're going to get a phenomenal deal."