Some housing bubble news from Wall Street and Washington. Bloomberg, "Rhinebridge Plc, the IKB Deutsche Industriebank AG structured investment vehicle that has lost about half its value, is unlikely to repay all its debt. Rhinebridge suffered a ;mandatory acceleration event; after IKB's asset management arm determined the SIV may be unable to pay back debt coming due, the Dublin-based fund said. Rhinebridge had $1.2 billion in commercial paper outstanding as of Oct. 5, according to Fitch Ratings."

"Rhinebridge's mandatory acceleration event means all of the SIV's debt is now due, according to a company prospectus. As of late August, 79 percent of Rhinebridge's holdings were in the U.S. and 80 percent in mortgage-backed bonds, Fitch Ratings estimated in an Aug. 22 report. Eighty-three percent of the assets had the highest-possible AAA rating, Fitch said."

"Yields on overnight asset-backed commercial paper, rated A1+ by S&P and P1 by Moody's Investors Service, the highest for such debt, rose to 5.15 percent yesterday, according to Bloomberg data."

"That yield is 40 basis points more than the Federal Reserve's target rate for overnight loans between banks, compared with an average of about 8.5 basis points in the first half of the year. The wider difference signals that investors are still wary about holding asset-backed commercial paper."

"The amount outstanding has tumbled 25 percent since the week ended Aug. 8 to $888 billion, according to the Federal Reserve in Washington."

The Associated Press. "Wachovia Corp., the nation's fourth largest bank, said Friday its profit fell 10 percent in the third quarter, hurt by $1.3 billion in losses and write-downs related to turmoil in the credit markets."

"The Charlotte-based company also quadrupled its loan-loss provisions in the quarter and signaled increasing credit troubles ahead."

"Capital One Financial Corp. posted a third-quarter net loss Thursday, hurt by charges from shutting down its GreenPoint Mortgage business."

"It also recorded $898 million loss from discontinued operations related to the shutdown of GreenPoint Mortgage, which is largely complete, the company said. In acquired GreenPoint in December as a part of a $13.2 billion purchase of North Fork Bancorp, which operates banks in New York, New Jersey and Connecticut."

The Star Tribune. "MoneyGram International Inc. disclosed late Wednesday that it is the latest casualty of the subprime mortgage crisis. In an effort to reap higher returns, MoneyGram invested hundreds of millions of dollars of customer deposits in bonds backed by the high-rate mortgages. Now that many of those homeowners can't make their monthly payments, these bonds have plunged in value."

"MoneyGram said it would take a $230 million loss on mortgage-related investments, forcing the company to consider selling one of its largest business units."

"'The question is: Are these losses just the beginning?' said Brett Horn, an equity analyst at Morningstar. 'No one seems to know for certain.'"

"As of June 30, MoneyGram had $1.5 billion invested in residential mortgage-backed securities, on top of the $384 million in subprime mortgages. MoneyGram could try to sell part or all of its investment portfolio, but that may be difficult in the current marketplace, and the company could suffer significant losses."

"'Who wants to buy a portfolio when a lot of the risk is unknown?' asked Robert Dodd, a senior analyst at Morgan Keegan & Co."

From Biz Journal. "The parent of Corus Bank, one of South Florida's largest condominium construction lenders, said its profit fell 31 percent during this year's third quarter."

"Corus reported $200 million in non-performing loans for Sept. 30. That gave it a 4.89 percent ratio of non-performing loans to total loans. Corus also said it has three South Florida condo loans -- totaling $91.6 million -- on completed projects that are experiencing 'presale fallout.'"

"At the end of the recent quarter, Corus had $7.3 billion in loans outstanding and committed on 129 condo construction and conversion projects. That included 22 projects with loans totaling $2.1 billion in South Florida."

"Corus said: 'At this point in the housing cycle, we are experiencing a disappointing decrease in origination volume, and a certain, albeit very manageable, degree of problem loans. We anticipate that problem loans could get worse before they get better.'"

The Wall Street Journal. "Earlier this week, Cheyne Finance PLC, a SIV managed by London-based hedge-fund group Cheyne Capital Management, halted payments to its creditors. Its receivers said they expect to complete a sale of its assets in the next two to three weeks. Cheyne had roughly $6.6 billion in assets as of August."

"A U.S. real-estate fund has sued HSBC Holdings PLC, alleging that the British bank's U.S. mortgage-trading operations took advantage of the crisis to profit at the expense of the fund."

"Luminent Mortgage Capital Inc., a San Francisco firm that invests in residential-mortgage securities, claims that HSBC's New York office placed an improperly low valuation on nine subprime-mortgage bonds, which the fund's subsidiaries had put up as collateral for loans."

"According to the complaint, HSBC bought the bonds at a deep discount to their fair value, in at least one case employing an auction that included only one other bidder."

"The dispute highlights a problem that many banks and investors faced this summer as troubles in subprime mortgages triggered a broader credit crisis. Market prices for many types of securities all but disappeared, forcing holders of the securities to come up with estimates of their value."

"Because those estimates often involved subjective criteria, they left ample room for possible dispute."

"Irwin Financial Corp., a lender focused on small business and consumer mortgage loans, said Friday it expects to report a third-quarter loss of $15 million to $20 million due to discontinued operations."

"'Our provision in the third quarter has created significant reserves for larger potential losses from future repurchase demands in the discontinued operations and loan losses in our consumer home equity portfolio,' CEO Will Miller said."

From Reuters. "St. Louis Federal Reserve President William Poole said on Thursday the recent U.S. housing market cycle diverged from past experience because it had been fueled by developments in the securities markets."

"'This cycle was really quite different and the boom was driven importantly by the growth of the subprime market and the securitization of those markets,' Poole told a monetary policy conference."

"'(It) all worked as long as house prices were rising -- and it all collapses when house prices stop rising. Obviously, this segment of the market, it is going to be a long time before it comes back,' Poole said."

"'I think this housing cycle is ... in many respects quite different from previous housing cycles, and has unique characteristics from the housing cycles from the postwar period, and is unlikely to give us much insight into the housing market for the longer run,' he said."

"Billionaire Warren Buffett said he was skeptical about the U.S. Treasury's plan to create an $80 billion fund to buy distressed assets from structured investment vehicles linked to home lending."

"'I don't see any way that pooling a bunch of mortgages, changing the ownership, is going to change the viability of the mortgage instrument itself -- whether people can make the payments,' he said. 'It would be better to have them on the balance sheets so everyone would know what's going on'"

From MarketWatch. "Residential builder NVR Inc. on Friday said its third-quarter net income fell 30% from a year earlier as the industry continues to wrestle against a softening housing market."

"The Reston, Va.-based builder said its results included land-deposit impairments of about $96.5 million. NVR noted activity slowed 'significantly' in August and September due to tightening in credit markets."

"The average new-order price in the third quarter fell 9% from a year earlier to $330,100, the firm said. The cancellation rate rose to 27% from 16% in the second quarter."

"First American LoanPerformance today announced the release of its August 2007 LoanPerformance Home Price Index. 'This latest home price index confirms that property values in key mortgage markets like California, Nevada, Florida, and Arizona continue to exhibit on-going declines,' said Damien Weldon, VP of collateral and prepayment analytics for First American LoanPerformance."

"'Within these States, cities like Los Angeles, Las Vegas, Miami and Phoenix are leading the market downwards. At the ZIP code level, the picture is often much bleaker because there are individual ZIP codes that are down nearly 20 percent compared to last year,' added Weldon."