Some housing bubble news from Wall Street and Washington. The Star Ledger, "Just a few years ago, Hovnanian Enterprises held lotteries to sell new homes because demand for housing was white-picket-fence hot. Now, with the residential real estate slump deepening by the month, the largest New Jersey-based homebuilder is holding a fire sale at developments across the country. Prices this weekend will be slashed by up to six figures -- $100,000, $149,000, in some cases $240,000."

"Housing industry experts say the discounts being offered by Hovnanian are unprecedented. The so-called 'Deal of the Century' sale, which covers 19 states, begins at Friday and ends Sunday. Hovnanian VP Michael Skea said the company recognizes some recent homebuyers might feel uneasy about the sale. However, most of those buyers probably received some type of incentive as well, he said."

"'Those who purchased previously already chose the home and location they wanted,' he said. 'Those may not have been the same if they'd gotten a 'Deal of the Century' home.'"

The Phillyburbs. "Orleans Homebuilders lost $66.9 million this year as customers cancelled contracts and the company abandoned planned communities."

"'On a daily basis, we're presented with different opinions and challenges regarding the direction of the economy, the impact of the subprime and other mortgage issues, and the recent turmoil in the credit capital markets,' CEO Jeffrey Orleans said during a conference call."

"'Although we began the year with solid margins in the first quarter, things deteriorated quickly,' said Orleans President Mike Vesey. 'The decline reflected the softer market and the incentives we used to reduce our inventory of spec homes.'"

The Sun Times. "The problem with specializing is that when times are good in a particular market — they’re very good, but when they’re bad, they’re horrid. That’s the story of Chicago-based Corus Bankshares Inc., which concentrates in commercial real estate lending, particularly in the condo market."

"'There’s a pretty big fear running around Wall Street about the pricing in the residential market and condos,' said Peyton Green of FTN Midwest Securities Corp."

"Problems could arise if buyers walk away from condo contracts or sue to get out of them, noted Ronald Peterson, a Chicago analyst with Sterne, Agee & Leach. Peterson said it’s hard to tell what’s going to happen in the Florida market, where Corus is heavily exposed. Las Vegas is another significant market for Corus."

The Dallas Morning News. "This year's slowdown in homebuilding might mean better quality of construction for buyers. That's because builders are no longer in such a hurry to finish houses."

"'The builders are carrying higher amounts of inventory than they have in the past,' said Paula Sonkin, VP of the real estate and construction industries practice at J.D. Power and Associates. 'They are delivering more homes on time and complete, so there are fewer construction problems. It's a silver lining to the slowdown in the market.'"

"J.D. Power just completed its annual survey on the U.S. homebuilding industry. The annual ranking is closely watched by both consumers and builders."

"'If they are at the top of the list, they will be advertising it and telling their customers,' said David Brown with housing analyst Metrostudy Inc. 'In this market, anything they can do to set them apart from others is important.'"

From Reuters. "Countrywide Financial Corp, the largest U.S. mortgage lender, said it had funded $34.4 billion of mortgage loans in August, the fewest this year and down 17.3 percent from a year earlier, as it lost access to capital and tightened lending standards. Its pipeline of unclosed mortgages fell 16.8 percent from July to $51.8 billion."

The Street.com. "JPMorgan Chase plans to stop offering certain Alt-A mortgages. The New York banking company said in an internal memo on Wednesday that all mortgage loan locks and underwriting under the ChaseFlex 'No Doc' or 'No Ratio' programs must be completed by Sept. 19."

"'We're sort of moving along a continuum,' a Chase spokesman says. 'We're taking a more disciplined approach and in the process reduced our risk because the borrower has more stake in the game -- either their own cash, a better credit rating or proven their documented income or assets.'"

"First Horizon National Corp, the largest bank in Tennessee, said on Wednesday it plans to eliminate at least 1,500 jobs by the middle of next year as it slashes its mortgage sales force and closes branches." "The bank also said it expected mortgage originations to decline significantly as it cuts up to 50 percent of its home loan sales staff."

The Baltimore Sun. "In the wake of the subprime lending crisis, a state mortgage-broker trade group is taking steps to shore up the profession's image and separate itself from unethical brokers who contribute to borrowers' mortgage woes."

"'We've been very concerned for a number of years that within the large universe of mortgage brokers, there are a number of bad apples,' said Thomas Shaner, the Maryland Association of Mortgage Brokers's executive director."

"The newly adopted code will give the association a legal means of suspending or revoking memberships, which it had no way to do in the past, even if a broker had been found by state regulators to have committed fraud, Shaner said."

From Canada.com. "Home prices across Canada are ripe for a fall, says one bank economist. Adrienne Warren, senior economist with Scotia Economics, said a bustling market has led to housing in many regions of the country being overvalued, increasing the risk of prices dipping in the longer-term."

"'There is little doubt that current trends are unsustainable,' added Warren. 'Affordability is becoming increasingly stretched for many would-be buyers after almost a decade of rising home prices. More recently, economic risks have increased in the wake of the intensifying financial market turmoil stemming from the U.S. subprime mortgage problems.'"

The Herald. "Bank of England Governor Mervyn King warned yesterday of a 'moral hazard' in any move to bail out financial institutions that have engaged in 'risky or reckless lending' - warning this could 'sow the seeds of a future financial crisis.'"

"King says: "The moral hazard inherent in the provision of ex-post insurance to institutions that have engaged in risky or reckless lending is no abstract concept....If central banks underwrite any maturity transformation that threatens to damage the economy as a whole, it encourages the view that, as long as a bank takes the same sort of risks that other banks are taking, then it is more likely that their liquidity problems will be insured ex post by the central bank.'"

"'The provision of large liquidity facilities penalises those financial institutions that sat out the dance, encourages herd behaviour and increases the intensity of future crises,' King said.""

From Bray People. "Residents of an exclusive Delgany housing estate who saw up to €100,000 wiped off the price of their homes have threatened to picket new homes being sold in the same development in order to warn prospective house buyers about what has happened."

"'There are a few houses left, so what we would be telling people is to hang on because in another couple of months you'll get them for €100,000 less. Why run the risk of paying for them now,' said resident Daithi O Maitiœ."

"Mr O Maitiœ saw €70,000 shaved off the value of his two-bedroom property, which was bought for €550,000 just four months ago and is now valued at €480,000."

"His neighbour, Seán O Hé, paid €675,000 for his three-bedroom house last December which is currently valued at €595,000, a drop of €80,0000."

"'When I first heard about this, it set alarm bells off in my head,' said Mr. O Hé. My big concern is the negative equity in the property. 'We're continuing to service mortgages of up to €100,000 more than our homes are worth.'"

"The global credit crunch is spreading, adding commercial and residential property in Britain and beyond to its list of victims."

"Such has been the force of the re-pricing of credit that properties of all sorts in many places have become markedly more difficult and expensive to finance over the past month."

"It is also true that in many places, notably Britain and Spain, both commercial and residential property have been in a speculative bubble pretty similar to the one now unwinding so painfully in the U.S. Similar, in that property investment everywhere was fuelled by global markets with super-easy borrowing terms."

"Similar too, in that many property markets were, in the final analysis, going up because they were going up. People were buying because they expected future gains and feared missing out."

"'We are forecasting falls in property values in the UK,' said Martin Allen, who covers property at Morgan Stanley Research Europe in London."

"'There is risk on the downside from our central case which is a modest fall of property values. There is a relatively high probability that it is going to be worse than that,' Allen said."

"Allen sees it as a global phenomenon and one that won't improve quickly even if interbank lending issues settle down. 'The problems are systemic, there has been overlending to property and it will take years to purge from the system.'"

"Yields on British residential property are also quite a bit lower than financing costs, with many small investors subsidizing their running costs out of capital in hopes of future capital gains. If those gains, which have been massive in recent years, don't continue, many will decide that subsidizing someone else's monthly housing costs no longer looks like such a great deal."

"There are a lot of reasons why Britain is different than the United States. There are a lot of reasons why Ireland and France are, as well."

"But that is what house buyers in New York were saying about Florida not so long ago."