Some housing bubble news from Wall Street and Washington. "NetBank Inc. will try to stay afloat by selling assets to EverBank Financial Corp. The sale will cause a loss of $60 million to $70 million, said NetBank. Regulators are 'increasingly concerned' about NetBank's losses and capital level and told the company to 'find an alternative immediately' to cover its deposit obligations, the statement said."

"'The company isn't done, but it's close,'' said analyst Christopher Marinac. 'It's a very unfortunate casualty of the mortgage market because the deposits at this company have been rock-solid for the last three years.'"

From The State. "In March, when CEO Steven Herbert talked about focusing NetBank on core banking and mortgage activities, he likened the company’s journey back to profitability with traveling through a tunnel. On Monday, Herbert all but conceded that instead of seeing a light at the end of that tunnel, he now faces the glare of an oncoming train."

"'What we were doing was not working,' Herbert said of the past few years. 'We needed to make some changes.'"

"But the company reported in March a $168 million loss for 2006, and that cash situation has not improved. Federal banking regulators were worried, Herbert said. 'They made it pretty clear that if we did not take action to resolve our deposit issue,' he said, 'they also were not going to hesitate to step in.'"

From Fitch Ratings. "Though subprime closed-end second-lien (CES) RMBS transactions represent a small sub-sector of the overall subprime RMBS universe, these transactions are proving to be some of the worst performers through the first four months of 2007."

"At this time the cumulative exposure to subprime CES RMBS transactions in these CDOs is not sufficient to cause Fitch to place any tranche on Rating Watch Negative."

"However, as Derivative Fitch expects this negative performance trend to continue, the potential for negative actions on both high-grade and mezzanine SF CDOs increases dramatically where there are significant exposures to 2006 subprime CES RMBS and limited asset manager flexibility to sell assets."

From Inman News. "The downturn in the housing market appears to have caused more layoffs in construction and mortgage lending than real estate sales, the Mortgage Bankers Association reports."

"While the National Association of Realtors reported that there were about 1.3 million Realtors at the end of 2006, the MBA report relied on Bureau of Labor payroll statistics, which counted 386,000 real estate agents and brokers at year-end."

"'Thus our estimate, which excludes self-employed workers, understates the actual employment in housing-related industries and could underestimate the extent of the decline in housing-related employment,' the report said."

The Chicago Tribune. "USG Corp. on Monday disclosed plans to eliminate about 500 white-collar jobs, or about 10 percent of its salaried workforce, as the nation's deep housing slump continues to take a financial toll on the Chicago building-products company."

"The maker of gypsum wallboard, citing adverse 'current market conditions,' outlined the cost-cutting plan in a Securities and Exchange Commission filing. The company has already scaled back its operating capacity, as a drop-off in U.S. housing starts has dampened previously white-hot demand for wallboard, a spokesman noted."

From Bloomberg. "Five banking industry groups unveiled a set of principles, including more clearly disclosed loan terms, they're advocating for lenders, lawmakers, and regulators trying to protect borrowers with subprime housing loans."

"Lenders should issue loans only if borrowers can afford to repay them and should work with consumers to prevent foreclosures, the groups wrote in a statement released yesterday."

"'There's going to have to be some form of uniform standard by which the consumer and the industry can abide by and live with,' James Ballentine, the American Bankers Association's director of housing, said."

From Reuters. "Little can be done to change the terms of subprime mortgages to prevent foreclosure because of the way loans that were packaged and sold to Wall Street investors, mortgage industry executives said Monday."

"'For the future, we may be able to rewrite those documents so that they're more modification and remediation-friendly, but unfortunately (today's mortgage-backed security) deals...and the servicer's hands, in many respects, are pretty tied,' Michael Marriott, a co-head of Credit Suisse's mortgage group, told a secondary-mortgage market conference organized by the Mortgage Bankers Association."

"Surging defaults on subprime mortgages, which cater to borrowers with poor credit histories, and more than two dozen collapsing lenders are exacerbating the already precarious U.S. housing market."

"Countrywide CEO Angelo Mozilo said depreciating home values are the main culprit."

"'The cause of the problem that we have today is decreasing values. That's the cause of the problem, because we didn't have delinquencies and foreclosures when values were going up,' he said at a Mortgage Bankers Association conference."

"'First-time home buyers were begging us to make them loans because they thought home values were going up significantly, and so they put a lot of pressure on us to make them loans,' he said."