Some housing bubble news from Wall Street and Washington. Bloomberg, "Sales of existing homes in the U.S. fell more than forecast last month, a sign that residential real estate remains mired in its worst recession in 16 years. Purchases declined 3.8 percent to an annual rate of 5.75 million, the slowest pace since November 2002, from a revised 5.98 million in May, the National Association of Realtors said today in Washington."

"Regionally, existing-home sales in the South are 11.4 percent below a year ago. Existing-home sales in the Midwest are 8.1 percent below June 2006. Existing-home sales in the West are 19.1 percent below a year ago. Existing-home sales in the Northeast are 7.3 percent lower than June 2006."

"Lawrence Yun, NAR senior economist, said some consumers are uncertain. 'Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate,' he said."

"NAR President Pat V. Combs said that local market conditions vary widely. 'Consumers should avoid making decisions based on what they hear about the national market because all real estate is local,' she said."

The Associated Press. "'It appears that some buyers are looking for more signs of stability before they have enough confidence to make an offer,' Yun said."

"Yun said that if the price decline turns out to be greater than he is forecasting that would raise concerns that consumers could cut back on their spending by enough to raise worries about a possible recession for the overall economy."

"The Realtors are forecasting that sales of existing homes will fall by 5.6 percent this year with prices dropping by 1.4 percent. That would mark the first annual price decline on record."

"Private economists...noted that existing home sales were falling at an annual rate of 28 percent in the second quarter, the steepest plunge so far in the downturn."

"'Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year,' said Ian Shepherdson, chief economist at a private forecasting firm."

From CNBC. "The median price of a new home edged up slightly to $230,300 in June, a small 0.1% increase from the sales price a year ago. That was the first year-over-year price increase in 11 months, but analysts cautioned that it would take more months to determine whether the downward trend in prices has finally stabilized."

"'The net increase in prices is very misleading,' said Mark Zandi, chief economist at Moody's Economy.com, in a CNBC interview."

"'[The increase] is related to the mix of homes that are transacting. The low end of the market is getting pummelled by the implosion in subprime, but it's being biased upward because the share of homes in the high end is greater now,' Zandi said."

From Reuters. "Centex Corp., the fourth-largest U.S. home builder, posted a fiscal first-quarter loss on Tuesday, as the U.S. housing market continued to decline. For the quarter ended June 30, the company posted a net loss of $128.0 million."

"The results included a $193 million, or 98 cents per share, pretax charge related to the declining value of building lots."

"First-quarter home-building sales fell 32 percent, as home sales declined 27 percent to 6,095. The average selling price of a home fell 5.5 percent to $291,179. Incentives and lower home prices helped sink gross margins to 8.1 percent from 25.6 percent a year earlier."

"New orders, which are not a factor in this quarter's earnings, fell 22 percent during the quarter to 6,474, with the Southeast and Central regions showing the greatest decline, Dallas-based Centex said."

The Daily News wire services. "Countrywide Financial, America's largest mortgage lender, said that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades."

"In a lengthy conference call with analysts, Countrywide's CEO, Angelo R. Mozilo, said home prices were falling 'almost like never before, with the exception of the Great Depression.'"

"'This is a huge battleship and it's headed in the wrong direction,' Mozilo said."

The New York Times. "Many of Countrywide's home equity loans were second mortgages made to people who were financing the full or nearly full cost of their homes. 'Countrywide is highlighting what is an industry-wide problem,' said Christopher C. Brendler, an analyst with Stifel Nicolaus. A second mortgage 'is really an unsecured loan, like a credit card.'"

"Executives at Countrywide for some time had been more skeptical than others, but the bluntness of their comments surprised many on Wall Street."

"In June, the usually optimistic Robert I. Toll, CEO of luxury home builder Toll Bros., acknowledged that housing might not rebound before April 2008. In early February, Toll had told Wall Street analysts the industry was 'at the beginning of the comeback trail.'"

The New York Post. "Mozilo told analysts the housing climate is so bad it will force the 10 giant mortgage firms like his to consolidate or perish. 'I think we'll get to five,' Mozilo said while discussing Countrywide's second-quarter earnings bomb, its third-straight quarterly loss."

"'You've seen it in terms of Wachovia and World, and Fleet and Bank of America. Nothing is out of the realm of possibility,' Mozilo said."

The Union Tribune. "Shares of troubled subprime mortgage firm Accredited Home Lenders skidded 15 percent yesterday, highlighting investor fears that the company's proposed $400 million sale to a private equity firm could fall apart."

"Investors have been slow to embrace the proposed takeover. Lone Star originally set a July 17 deadline for shareholders to tender the stock. Only 21 percent did so."

"'That's shockingly low,' said Bud Leedom, publisher of the California Stock Report. 'I really don't know why it hasn't been more successful. This thing has been trading like a broken deal almost from the start.'"

"The cost to insure the debt of U.S. home builders is trading at its highest level in at least five years. As spreads deteriorate, most builders' credit default swaps are trading at levels that imply much lower ratings, and many investment grade builders are trading at levels that imply junk ratings, according to the credit strategy group at Moody's."

"In high yield, K. Hovnanian Enterprises, Inc. is trading at levels that imply a rating of 'Caa1,' seven levels below investment grade, and three levels below its actual rating of 'B1,' according to Moody's."

"Bear Stearns recently upgraded its recommendation on Hovnanian to 'outperform,' saying the current trading levels of more than 600 basis points imply more distress in the name than is the case. 'I think that 600-plus in CDS is implying a liquidity event ... which we absolutely don't see at this point,' Bear Stearns analyst Sue Berliner said on Monday in a conference call."

"Benchmark ABX indexes fell to record lows on Wednesday as July performance data showed further deterioration in loans underlying subprime mortgage securities, traders and analysts said."

"The '"BBB-' indexes are down by one to two points across the board on the latest remittance reports,' said one trader. July remittance reports are 'worse than we expected,' said another market source. 'Delinquencies are accelerating still.'"

"Defaults on some so-called Alt A mortgages packaged into bonds last year are now outpacing those from subprime loans, according to Citigroup Inc."

"The three-month constant default rate for 2006 Alt A hybrid adjustable-rate mortgages is 2.3 percent, compared with 2.2 percent for subprime ARMs, Citigroup analysts led by Rahul Parulekar wrote."

"The speed at which Alt A hybrid ARMs are being paid off due to home sales or refinancing has also fallen to about the same level as for subprime ARMs, which typically prepay more slowly, the analysts said."

"Moody's Investors Service last week said it may downgrade $316 million of Alt A securities created last year, joining Standard & Poor's in saying it is considering downgrading such bonds. Ratings cuts and warnings by the New York-based services have so far affected more 2006 subprime securities."

"Alt A mortgages, short for Alternative A, are loans that fall just short of the typical underwriting standards of Fannie Mae and Freddie Mac, the two largest mortgage companies. They're usually granted to borrowers with good credit records who seek atypical underwriting or loans, such as reduced proof of their pay, lending on an investment property or so-called option ARMs."

"Average default rates obscure that 'within things called Alt A, we see a very wide spectrum of credit quality,' said Andrew Davidson, the head of Andrew Davidson & Co. Inc., which sells consulting service and risk analytics for mortgage and asset-backed bonds."

"'That's the problem with Alt A: It's a name that doesn't really have a meaning,' said Davidson."

From Marketplace. "Steve Henn: In Slavic Village — a working-class neighborhood in Cleveland — there were almost 400 foreclosures last year. Entire blocks have been blighted."

"Jim Rokokis is the local county treasurer. He'll be testifying today and is glad to finally have Congress' ear. Jim Rokokis: It's only now that there is blood flowing on the streets of Wall Street that people are paying attention to this problem."

"This year alone, Rokokis expects 17,000 foreclosures in his county. According to Cayahoga county statistics, just one lender, Argent Mortgage, has seen about 25 percent of its loans in Cleveland go under. Rokokis estimates Argent's Cleveland-area portfolio is almost one-quarter of a billion dollars in the red."

"In 2006, Argent's sister company, Ameriquest, settled a massive abusive lending case for $325 million."