Some housing bubble news from Wall Street and Washington. Bloomberg, "Toll Brothers Inc., the largest U.S. luxury-home builder, reported its first quarterly loss in 21 years and said the housing slump is the worst the company has seen in decades. The company took a pretax expense of $314.9 million to write down inventory and land in the fourth quarter. The number of homes Toll delivers in fiscal 2008 may fall as much as 42 percent to 3,900 from a year earlier, Chief Financial Officer Joel Rassman said in the statement."

"Rassman estimated the average sale price in fiscal 2008 will be $630,000 to $650,000, down as much as 9 percent from 2007. In fiscal 2007, the average price of a Toll home fell to about $694,000, or 2.4 percent."

"The number of contracts signed in the fourth quarter fell the most in Toll's West region of Arizona, California, Colorado and Nevada, where orders tumbled 87 percent. The second largest decline was in its South region, which includes Florida and Texas, where orders slumped 44 percent."

From CNN Money. "'By many measures, fiscal 2007 was the most challenging of the 40 years that Toll Brothers has been in business,' Chairman Robert Toll said in a statement. '1974 was perhaps rougher, but the difficult times only lasted one year.'"

"The one area where Toll saw a jump in revenue in the latest quarter was land sales, as the company paired back on its holdings to just under 60,000 lots, down more than a third from a peak in April 2006."

"Besides having land sales increase more than eight-fold from a year earlier to $2 million, the company said it has continued to renegotiate, and in some cases, reduce its optioned land positions."

The Scotsman. "Housing sales at Crest Nicholson, the housebuilder bought six months ago for £715 million by HBoS and Sir Tom Hunter's West Coast Capital private equity firm, have fallen 15 per cent since September. Buy-to-let investors account for about 35 per cent of Crest's apartment sales, but numbers across the country have fallen by half since October."

"Royal Bank of Scotland Group Plc, the U.K.'s second-biggest bank, reported 1.5 billion pounds ($3 billion) of writedowns from slumping credit markets and said earnings will exceed analysts' estimates this year."

"Rabobank Groep NV, the biggest Dutch mortgage lender, will bail out its Tango Finance Ltd. structured investment vehicle by taking on 5.2 billion-euros ($7.6 billion) of its assets to avoid a fire sale."

"'There is no immediate prospect of the funding situation for SIVs improving in 2008,' the bank said. 'To prevent a potential fire sale of high quality assets, the bank has announced that it is prepared to take the remaining assets of Tango onto its balance sheet.'"

From Reuters. "Canadian Imperial Bank of Commerce noted that conditions in the troubled U.S. residential mortgage market have worsened since the end of its financial year, and it projected C$225 million in additional writedowns for the month of November."

"The bank also said that it could face 'significant future losses' in U.S. mortgage-related derivative contracts that are hedged with counterparties, depending on changes in market and economic conditions."

"'Conditions in the U.S. residential mortgage market have continued to deteriorate since year-end,' the bank said."

"'In addition, we have exposures to the U.S. subprime residential mortgage market through derivative contracts which are hedged with investment-grade counterparties,' CIBC said."

"As of October 31, the notional amount of these hedged contracts was C$9.3 billion. The related on-balance sheet fair value was C$4.0 billion, the bank said."

"'We've been suggesting for some time that the gross exposure would be a more relevant number, particularly since a number of global credit insurers have been under a lot of market pressure because of concerns about their ability to honor their counterparty contracts,' said Blackmont Capital analyst Brad Smith Without knowing who the counterparties are, and the size of the bank's exposure to each one, it is difficult to do further analysis, Smith said."

"MBIA, the largest bond insurer in the world, said on Thursday it is looking at ways to shore up its capital base, a day after rating agency Moody's Investors Service said the insurer was "somewhat likely" to require additional capital."

"U.S. mortgage assets in collateralized debt obligations have lost so much value that the top classes of the securities may be worth as little as 20 cents on the dollar in a liquidation, Barclays Plc analysts said in a report."

"About 20 percent to 30 percent of principal would be covered for the 'super senior' portions of mezzanine asset-backed bond CDOs, which mainly contain mortgage bonds and other CDOs initially assigned low investment-grade ratings, Barclays said."

"Standard & Poor's on Wednesday said that proceeds from the liquidation of mortgage-backed securities by a collateralized debt obligation will be insufficient to pay back investors in the deal."

"The CDO, sold by Credit Suisse Alternative Capital and dubbed Adams Square Funding I Ltd, liquidated its assets after a collateral trigger in the deal was tripped, which led to an 'event of default.'"

"Proceeds from the asset sale, in addition to collateral held in the deal, will not be sufficient to pay back the CDO's most senior noteholders, originally rated 'AAA,' and no proceeds will be available for any other noteholders, S&P said."

"Freezing rates on subprime mortgages may lead to further deterioration in ratings of bonds backed by the loans despite its goal of reducing losses, Standard & Poor's said on Thursday."

"The credit ratings agency's statement came amid a federal plan to staunch soaring foreclosures on U.S. adjustable mortgages by freezing interest rates ahead of scheduled resets."

"'Absent any real offset to default frequency and loss severity that may result from the enactment of any loss mitigation proposal, simply freezing interest rates on some U.S. first-lien subprime mortgage loans would have a negative impact' on ratings of certain bonds, it said."

"'Standard & Poor's supports appropriate loss mitigation strategies to prevent foreclosures and allow subprime borrowers to remain in their homes,' the unit of McGraw-Hill Cos. said. 'In certain instances, the negative effects may outweigh the positive benefits.'"

From CNBC. "I was reading the report from the Mortgage Bankers Association this morning on delinquencies and foreclosures. None of it was particularly unexpected, but I was struck by one aspect, and that is the amount of prime loans that are going into foreclosure."

"The headline of course is that 43 percent of all new foreclosures are subprime adjustable rate loans, but that means that 57 percent are not. They're prime and Alt-A loans, and all the bailout plans we're hearing seem to have nothing to do with them."

"The Mortgage Bankers Association reported that 0.78 percent of mortgages entered the foreclosure process in the three months ended Sept. 30. The homeowners entering foreclosure brought the total percentage of loans in the foreclosure process to a record high as well of 1.69 percent."

"The report also showed that 5.59 percent of borrowers are now at least 30 days late making their mortgage payments, which is just below the record high of 5.68 percent set in 1986. And a record 1.26 percent of the borrowers were 90-plus days late, putting them at significant risk of going into foreclosure."

"Doug Duncan, chief economist for the lenders' trade group, said those rising delinquencies rates suggest that the problems have not hit bottom."

"The survey shows more than 20 percent of the seriously delinquent loans in the nation are in California and Florida, while more than 15 percent are in Michigan, Indiana and Ohio."

"'As go Califorina and Florida, a lot of these numbers will go,' he said. 'We've probably not seen this combination of factors before, and that makes it difficult to forecast.'"

"The surge in foreclosures is expanding the inventory of unsold homes and contributing to the decline in housing demand. Sales of new and previously owned homes probably will drop to 5.09 million next year, 32 percent below the 2005 peak of 7.46 million, according to Frank Nothaft, chief economist of Freddie Mac."

"'These are the first numbers we've seen that combine the meltdown of the credit markets with the drop in home prices,' said Jay Brinkmann, VP of research and economics for the bankers trade group."

"There is a 'substantial' risk that U.S. home prices will slide for the next three years or more, in a downturn that could be unlike anything seen before on a national level, Morgan Stanley said on Thursday in a report."

"Price levels of the RPX Index, a derivative index based on home prices in 25 U.S. metropolitan residential property markets, indicate an expectation that prices will decline for the next three years, with a recovery likely to occur between three and four years from now, Morgan Stanley said."

"'The property derivatives market seems to be suggesting that we are in a very different environment, on the heels of market events that could force a housing recession like none ever imagined or experienced,' Morgan Stanley analysts said."

The Associated Press. "The amount of equity homeowners hold in their homes slipped in the third quarter to just above 50 percent, according to a report from the Federal Reserve Thursday."

"Economists expect this figure, equal to the percentage of a home's market value minus mortgage-related debt, to tumble even further as falling home prices eat into equity. It could easily drop below 50 percent by the end of next year, some experts say, marking the first time homeowners will owe more than they own since the Fed started recording the data in 1945."