Some housing bubble news from Wall Street and Washington. CNN, "The battered real estate market was even weaker than expected in April, as the pace of existing home sales fell to a nearly four-year low, and a glut of homes on the market continued to cut into home values, according to the National Association of Realtors."

"'We've been anticipating slower home sales because many subprime loan products are no longer available,' Lawrence Yun, NAR senior economist said a statement. 'In addition, increased scrutiny by lenders is stopping risky mortgage origination.'"

"The tougher lending standards are now cutting into sales, causing a rise in the supply of homes on the market for what is typically the start of the spring selling season."

"That glut continues to slam home values. The median price of a home sold in the month was $220,900, down 0.8 percent from the $222,600 price for a typical home sale a year earlier."

"It marked the ninth straight month that prices showed a decline from a year earlier, a relatively rare condition that had not been seen in 11 years before the current housing slump. The annual pace of existing home sales fell 2.6 percent to 5.99 million in April, down from a revised 6.15 million pace in March. It's the first time the pace of sales fell below the 6 million level since June 2003."

From Inman News. "Total housing inventory rose 10.4 percent at the end of April to 4.2 million existing homes available for sale, which represents a 8.4-month supply at the current sales pace, up from a 7.4 month supply in March."

"Regionally, existing-home sales in the Midwest are 11.5 percent below a year ago. In the South, sales of existing homes slipped 8.8 percent below April 2006. Existing-home sales in the West declined 15.6 percent below a year ago. Existing-home sales in the Northeast fell 8.8 percent lower than April 2006."

"'It appears the worst of the price correction is behind us,' said Pat Combs, NAR's president."

The Washington Post. "The Commerce Department reported yesterday that April sales of single-family homes...fell 10.6 percent short of the April 2006 estimate of nearly 1.1 million homes. The median sales price of new houses sold in April was down 11.1 percent from March, the largest monthly decline on record."

"'In terms of the home builder industry, the bad times are not over,' said Gregory E. Gieber, VP of research at A.G. Edwards. 'This is probably one of the worst recessions I've ever seen for housing.'"

"'The very sharp decline in the median price suggests many sales occurring now are coming at the expense of quite a bit of discounting of homes,' said Celia Chen, director of housing economics for Moody's Economy.com. 'It's probably too soon to declare the end of the housing correction.'"

"'I wouldn't be surprised by some downward revision of April figures and some downward numbers in May,' David F. Seiders, chief economist for the National Association of Home Builders."

From MarketPlace. "Seiders says...we're still in a depressed housing market. 'The builders are saddled with a very heavy inventory overhang. Over half the builders in my most recent survey saying they are cutting prices to try to move inventory.'"

From CNN Money. "Most industry watchers agree that home prices will continue to slide before they recover, but now some economists say they've got a long way to fall before bouncing back. David Wyss, chief economist at Standard & Poors, has forecast a price drop of about 8 percent for the 24-month period through the fourth quarter of 2008."

"Housing prices will suffer from a 'significant increase in defaults and foreclosures,' he said, with affordability still a major issue."

"He said its impact on areas like South Florida, where much of the buying is speculative investment in second homes, could be big. 'You don't need a second home,' Wyss said."

"Economist Celia Chen followed Wyss' lead. 'We also have an 8 percent decline in median house prices [for the 24-month period ending March 31, 2008].'"

"'That is quite a bold forecast,' NAR economist Lawrence Yun, said of Wyss's prediction. NAR is predicting a much less severe total decline of 1.4 percent through the slump, prices have already declined three straight quarters, and that a recovery will start to take place in early 2008."

"'The run up,' Yun said, 'was an investor-demand driven boom, and it was followed by an investor-driven collapse.'"

From Reuters. "'With respect to the recent problems in the subprime mortgage market, the Board plans to consider how it might further use its rulemaking authority...to address particular lending practices,' Fed Chairman Ben Bernanke said in a letter released on Friday."

"Delinquent payments and foreclosures have since risen as many adjustable rate loans reset at higher interest rates and U.S. home prices stagnate or fall in some areas."

"Comptroller of the Currency John Dugan said he found it telling that lenders have responded to new housing market conditions by tightening standards on stated income and that loan servicers are verifying income before a loan is restructured."

The Orange County Register. "Mortgage rates in Orange County spiked this week, at exactly the wrong time for a sluggish housing market. The average rate on a 30-year fixed loan with a one-point fee hit 6.107 percent for the week ended Thursday, its highest level in seven months."

"'The market is finally getting into its head that the Fed's not going to decrease rates, said Josh Lewis, a mortgage broker in Costa Mesa."

"Another reason is the spike in loan defaults, he said. Investors in bonds backed by mortgages are demanding higher yields to compensate for the risk more loans will go bad."

"New Century Financial Corp., the largest U.S. subprime lender in bankruptcy, on Thursday said it uncovered accounting errors in its 2005 financial statements, and probably 'materially' overstated earnings for that year."

"New Century had been one of the largest U.S. providers of home loans to people with poor credit histories before filing for bankruptcy protection on April 2. New Century has said at least 27 lawsuits have been filed against the company, its officers and its directors."

From Bloomberg. "Two thirds of HSBC Holdings Plc's $10.6 billion in loan defaults last year were in North America. The bank put a new U.S. management team in place and reinforced credit controls, HSBC CEO Michael Geoghegan said."

"'We have stopped production on nonprime correspondent mortgage loans and eliminated certain classes of products,' he said. 'We have recognized the problem ahead of the industry, and we have taken swift and decisive steps to fix it,' he said. HSBC (is) Europe's biggest bank by market value."

"Angelo Mozilo, who built Countrywide Financial Corp into the largest mortgage lender in the United States, disavowed blame for the collapse, pleasing his audience of fellow mortgage-banking industry leaders and foot soldiers."

"'You've got to be careful here about blaming ourselves too much,' the chairman of Countrywide told the Mortgage Bankers Association this week."

"Marvin Von Renchler, a veteran mortgage broker in Oregon, isn't ready to shed a tear for consumers. 'I run into very few people who can legitimately say, 'I didn't know (what I was getting into).'"

"'People on Wall Street live in their own world,' said Jim Campen, an economics professor at the University of Massachusetts in Boston. 'They don't understand what's going on the other end. If these (subprime lenders) couldn't sell these loans to Wall Street, they couldn't do what they do.'"

"But many say they just do what the market wants. Peter Paul, considered a pioneer in bringing loans to well-off borrowers with untraditional financial histories, likens mortgages to clothing."

"'We're somewhat amoral about this kind of stuff,' he said. 'If we were fashion designers and they wanted purple polka dots, we might have our own opinion, but we'd probably give them purple polka dots.'"