Some housing bubble news from Wall Street and Washington. CNN Money, "Centex Corp., the fourth-largest U.S. home builder, reported a wider-than-expected fourth-quarter loss Monday as it responded to the U.S. real-estate slowdown by writing off and revaluing land and by exiting the sub-prime lending and commercial contracting businesses."

"CEO Tim Eller said the company was scrambling to deal with what he characterized as 'one of the most difficult markets in 25 years' and he acknowledged that he still sees 'uncertainty in many of our markets.'"

"In all, Centex said it booked $202 million in land option write-offs or land valuation adjustments during the quarter. The company said its results were also pulled down by higher discounts and sales incentives."

From MarketWatch. "'We know we won't experience any significant margin improvement through house-price appreciation for the foreseeable future,' the CEO Eller said. 'So we must think even more as a manufacturer.'"

"Sales trends softened in March 'as buyers became cautious due to the reports of subprime concerns and tighter lending standards,' said Cathy Smith, Centex's CFO."

"She said the cancellation rate in the latest quarter was 34%. The historical average for cancellations runs between about 20% to 25%, the CFO said. 'The main reason buyers are canceling remains the inability to secure financing or sell their existing homes,' Smith said."

"'Considering the lack of clear directional trends in the market, tighter mortgage lending standards, and soft results in March, we don't believe it's prudent to provide earnings guidance for fiscal 2008 at this time,' she said."

The Oregonian. "Millennium Funding Group, a major regional subprime lender, has halted its lending and cut all its jobs amid nationwide mortgage turmoil."

"The company had laid off 76 in March. After 71 layoffs late last week, only 10 workers remain in Millennium's downtown Vancouver headquarters. Their jobs will end after Millennium's remaining loans are closed."

"As he did in March, Joe Bell, VP of human resources of Ace Holding Co., the Indianapolis-based owner of Millennium, pointed to the subprime lending market as the chief contributor to Millennium's layoffs."

"'That was a large portion of our business,' Bell said. 'It was roughly 60 percent of business when we acquired Millennium in November, and that market just isn't there right now.'"

The Record. "The Paramus-based lending and loan payment collecting arm of a real estate investment trust is trying to shake off a serious bout of the subprime contagion."

"Within the past two weeks, Opteum Financial Services LLC, a subsidiary of Vero Beach, Fla.-based Opteum Inc., has closed its wholesale and conduit-lending businesses, eliminating 257 jobs."

"Reasons for the loan-office shutdowns included 'weakness in consumer demand' and 'deterioration in the secondary market for closed mortgage loans,' the company said in an April 20 filing with the SEC."

"About two-thirds of the loans the company makes are 'Alt-A,' which the company defines in its annual report as loans for those who would meet standard Fannie Mae or Freddie Mac underwriting guidelines, but are putting less money down and have less verified income than Fannie or Freddie would allow."

The New York Times. "In the spring of 1998, the chief financial officer of New Century Financial wrote an unusual paper describing a then little-known accounting technique."

"The executive, Edward F. Gotschall, marketed his white paper at industry seminars and conferences, and promoted it to Wall Street analysts as an insider’s look at New Century, according to people who read the paper."

"The technique promoted by Mr. Gotschall allowed the company to report profits before they actually existed. The paper profits were pegged to future earnings from loan sales to institutional investors. Some financial analysts say that New Century appears to have also used gain on sale to hide losses as the subprime market began to falter late last year."

"'The thing about gain on sale accounting is that you can create a machine that just manufactures earnings out of thin air,' said Richard Benson, an expert on securitization. Mr. Benson said that the stock prices of subprime home lenders like New Century Financial had 'collapsed so fast because the income and balance sheet had been built on gain on sale, which turns out to be imaginary.'"

"'The market woke up to the fact that there’s no there there,' Mr. Benson said."

From Reuters. "Subprime mortgage lenders created a surge in delinquencies in the past year by repeatedly breaking their own underwriting guidelines to capture business, analysts said on Monday."

"So-called 'exceptions' to loans were made as written standards did not change much, Michael Youngblood, a managing director and portfolio manager at FBR Investment Management Inc., said."

"'The amount of loan exceptions made in 2006 must be historically the highest,' he said."

"Subprime lenders also paid scant attention to 'soft' guidelines, such as how they analyze 'FICO' credit scores for each applicant, said Mark Milner, chief risk officer for PMI Mortgage Insurance Co."

"For instance, relying on a credit score that was generated by an applicant paying back bills to a doctor and securing a $200 credit line 'is just not enough,' he said."

"Pricing of collateralized debt obligation bonds laden with subprime mortgage securities is getting more perilous amid deep uncertainties over when ratings on the assets will be downgraded, money managers and Wall Street analysts said."

"'A lot of downgrading has to happen' on CDOs that include subprime asset-backed securities, said Lang Gibson, Merrill Lynch & Co.'s director of CDO research."

"The economist who prodded investors into the U.S. housing boom and has been skewered by bloggers during the bust is leaving a top real estate trade association, the group said Monday."

"David Lereah, the author of 'Are You Missing the Real Estate Boom?', will leave the the National Association of Realtors' by the middle of next month after serving as the head economist for seven years, a spokesman said."

"'David has been an expert in the field, is widely respected and has been an excellent spokesman for NAR,' said said Lucien Salvant of the real estate agent trade group."

"In October, Lereah said that he expected 'sales activity to pick up early next year.' In recent months, Lereah has pushed his expectations for recovery deeper into 2007 and has trimmed his forecast for home sales for the year."

"Problems in subprime mortgages caused a sharp drop in home sellers being able to find buyers for their homes in March, according to a trade group report Tuesday that showed the battered real estate market was much weaker than expected."

"The National Association of Realtors' Pending Home Sales Index fell 4.9 percent in March, following a 1.1 percent increase in February. The index was down 10.5 percent from the March 2006 reading."

"'Although the weather improved in March, we're starting to see the effects of a decline in subprime lending and tighter lending standards,' said a statement from David Lereah, the chief economist for the trade group. 'Home sales will be relatively sluggish in the second quarter, but a modest uptrend should resume during the second half of this year.'"