Some housing bubble news from Wall Street and Washington. CNN Money, "The housing market is only getting worse, according to the latest report from S&P Case/Shiller released Tuesday. Home prices were down 8.4 percent in November compared with last year in its 10-city index, a record low. The 20-city index also fell 7.7 percent. The Case/Shiller report compares same-home sale prices. The industry considers it to be one of the most accurate snapshots of housing prices."

"'We reached another grim milestone in the housing market in November,' said economist Robert Shiller, co-creator the index in a statement. 'Not only did the 10-city composite index post another record low in its annual growth rate, but 13 of the 20 metro areas, each with data back to 1991, did the same.'"

"The worst hit market of the 20 metro areas covered was Miami, where the median home fell a whopping 15.1 percent in value. San Diego prices also fell steeply, down 13.4 percent. Las Vegas was off 13.2 percent and Detroit by 13 percent."

"Every city in the index recorded at least three consecutive months of falling prices through November."

"The three biggest U.S. cities also recorded year-over-year declines; New York was down 4.8 percent, Los Angeles 11.9 percent and Chicago 3.9 percent. The losses in Los Angeles accelerated in November; that city recorded the largest month-over-month drop of any index city, 3.6 percent."

From MarketWatch. "For the 20 cities, prices fell a record 2.1% in November. In the past three months, prices fell at an annual rate of 16.2%."

"The housing and mortgage meltdown caused the biggest one-year drop in the rate of homeownership on record, according to government figures released Tuesday."

"The Census Bureau report showed that home owners accounted for 67.8% of occupied homes in the fourth quarter, down 1.1 points from a year earlier. It's the largest year-over-year drop recorded in the report. The ownership rate was also well below the 68.2% ownership rate in the third quarter of 2007."

"Homeownership rates, which have been tracked since 1965, hit a record high of 69.2% at the end of 2004."

"The report also also showed a record 2.18 million homes vacant and available for sale in the fourth quarter, up from the 2.07 million in the third quarter and the 2.1 million a year earlier."

"The fourth-quarter reading on vacant homes for sale matched the previous record set in the first three months of 2007."

"The number of foreclosures soared in 2007, with 405,000 households losing their home, according to a report released Tuesday. That's up 51 percent from the 268,532 homes that were repossessed in 2006."

"Total foreclosure filings soared 97% in December alone compared with December of 2006, according to RealtyTrac. For the year, total filings - which include default notices, auction sale notices and bank repossessions - grew 75%."

"More than 1 percent of all U.S. households were in some stage of foreclosure during 2007, up from 0.58 percent the year before."

From Reuters. "Countrywide Financial Corp, the largest U.S. mortgage lender, on Tuesday said more than one in three subprime mortgages were delinquent at year-end in the $1.48 billion portfolio of home loans it services."

"Countrywide said borrowers were delinquent on 33.64 percent of subprime loans it serviced as of December, up from 29.08 percent in September."

From Bloomberg. "Countrywide Financial Corp lost $422 million in the fourth quarter, failing on its promise to return to profitability. The mortgage company posted a $1.2 billion third-quarter loss, its first in 25 years."

"Provisions for credit losses were $924 million in the fourth quarter, compared with $937 million in the preceding quarter and $73 million in the year-earlier period. Results included $831 million of impairment charges tied mostly to home- equity securitizations (and) a $394 million writedown on loans the company holds."

"Loan production recorded a pretax loss of $448 million. Total loans funded fell 48 percent to $61.2 billion. Countrywide said 3.6 percent of the outstanding balances of home equity loans for 'prime,' borrowers in its servicing portfolio were more than 90 days overdue as of Dec. 31, up from 1.4 percent a year earlier."

"Countrywide faces a lawsuit by the New York city and state comptrollers and their pension funds, alleging Countrywide defrauded investors with overly optimistic comments. The lawsuit added 26 securities firms and two accounting firms this month as defendants."

"In its annual report filed with the U.S. Securities and Exchange Commission, Goldman said it was cooperating with requests from governmental agencies and self-regulatory organizations for information about securitizations, collateralized debt obligations and synthetic products related to subprime mortgages."

"Meanwhile, in its annual report filed with the SEC, Morgan Stanley said it was responding to subpoenas and information requests from governments and regulators concerning subprime and non-subprime mortgages. The SEC filings came on Tuesday."

"Morgan Stanley also said it was a defendant in lawsuits over its role as an underwriter of preferred stock offerings for mortgage lenders New Century Financial Corp, and Countrywide Financial Corp."

"Imagine a Morgan Stanley broker telling his or her client about some assets that are nearly worthless because they can't be sold. Would that customer feel any better that the brokerage was simply 'reclassifying' that investor's losses?"

"That seems to be the question facing investors in Morgan Stanley today after the brokerage and investment bank said it reclassified $7 billion of funded assets and $279 million in unfunded assets from Level 2 to Level 3."

"The levels are a new kind of accounting parlance Wall Street instituted last year. The bigger the number, the harder it is to sell or value the securities in question. In other words, Morgan Stanley no longer knows how much these assets are worth because no one is buying."

"Just as troubling for investors is how Morgan Stanley announced the move: It was buried on page 64 of its 191-page quarterly report. It's been a long three months since the firm won kudos for taking an aggressive $3.7 billion write-down that many thought would represent the worst for the firm."

"Home builder Meritage Homes Corp posted a net loss for the fourth quarter compared with a year-earlier profit, in part because of lower sales and charges for lower land values reflecting the slumping U.S. housing market."

"'This has been the most difficult year we've experienced in homebuilding in more than 25 years, and we currently expect 2008 will also be challenging,' Steven Hilton, Meritage's CEO, said in a statement."

"The fourth quarter net loss included $130 million of pretax real estate-related and joint venture valuation adjustments and $58 million of pretax goodwill write-offs."

"During the quarter, Meritage reduced its inventory of homes built on speculation by 10 percent, cut its purchases under options by about $55 million, and acquired about 650 fewer lots than it did the prior quarter."

"During the quarter, home closing revenue fell 25 percent to $615.6 million, due to an 18 percent decline in homes closed to 2,139, and a 9 percent decline in the average selling price of a home. Arizona had the largest decline in home closings, down 44 percent."

"New orders fell 13 percent to 1,048 and the value of the orders were off 23 percent to $271.6 million."

"Florida-based home builder TOUSA Inc TOUS.PK said it is filing for protection under Chapter 11, as part of a proposed restructuring, in the wake of the crumbling U.S. housing market."

"The filing includes TOUSA Homes Inc, Newmark Homes LP and entities that represent all their brands -- Engle Homes, Newmark Homes, Fedrick, Harris Estate Homes and Trophy Homes."

"Tousa Inc. lost 98 percent of its market value in the past year. There were 37 affiliates that also filed today."

"Tousa, the largest builder by assets and debts in bankruptcy and at least the 14th to file since June, missed three interest payments this month as home sales and prices fell in Florida, where the company does most of its business."

"The builder never recovered from the August 2005 purchase of Transeastern Properties Inc., a closely held Coral Springs, Florida-based homebuilder, said Robert Curran, a managing director at Fitch Ratings, who covers builders."

"'It was too much for Tousa, in the midst of a major market correction -- particularly bad in Florida -- and the addition of Transeastern never got any traction,' Curran said."

"'It's possible we'll see more homebuilders, both public and private, file for bankruptcy,' Curran said. 'As weak as housing has been, a possible recessionary environment will weaken it further still.'"

"Other homebuilders, such as Hovnanian Enterprises Inc., have said that Florida has been a drag on earnings. Hovnanian Chief Financial Officer Larry Sorsby referred last month to a 'Fort Myers effect' on the Red Bank, New Jersey-based builder's profit margins."

"'This action is necessary to reflect the realities of today's homebuilding market,' Antonio B. Mon, Tousa's CEO, said in a company statement."

"Florida had the second-highest number of foreclosure filings and properties in some stage of foreclosure in 2007 behind California. With more than 2 percent of its households entering some stage of foreclosure, Florida documented the second-highest state foreclosure rate for 2007, more than twice the previous year."

"Nevada posted the highest foreclosure rate for 2007 of 3.4 percent."

The Philadelphia Inquirer. "In the annals of financial fiascoes, the subprime-lending crisis has been especially big, messy and legally complex. What's more, people could end up going to jail."

"For weeks, a drumbeat has emerged from Philadelphia law firms calling attention to new or existing practice groups focusing on the subprime mess. As a general rule, it amounts to a repackaging of mortgage-lending, insurance, white-collar defense, bankruptcy and litigation services that firms have been providing for decades."

"But this repositioning is occurring in an entirely new and somewhat unfathomable context: an explosion of lawsuits, coverage disputes, and now criminal investigations resulting from the collapse of credit and housing markets."

"'There have been a lot of borrowers who have been hurt by what has happened here, and there is no doubt that foreclosures are skyrocketing, and now you see what is happening in the stock market. So there is a natural urge to figure out who is at fault, and that results in a lot of litigation,' said Alan Kaplinsky of one of the firms to set up a subprime-practice group."

"Tad Decker, CEO of Cozen O'Connor, said his firm was pulling together lawyers who focused on litigation, white-collar defense and bankruptcy to respond to diverse clients facing subprime problems. The firm's long-standing insurance practice also has found a niche interpreting coverage contracts for insurers facing payouts for the actions of corporate officers of companies sued by burned subprime investors."

"'This is a very visible, public problem that is affecting almost everyone,' Decker said."

"'In these kinds of situations, there are always fingers being pointed, and deep pockets sought, and scalps to try and obtain,' said Hank Hockeimer, a former federal prosecutor who now is a white-collar defense lawyer with the subprime group at Ballard Spahr."

"'I don't think you can point to one person's scheming or fraudulent behavior as causing this,' said Bonnie Glantz Fatell, leader of the business-restructuring and bankruptcy group at Blank Rome L.L.P. 'Housing values were going up, and there was a lot of money in the market, and people were getting very creative in how to offer financing to people with all levels of qualification.'"

The Tribune Herald. "As domestic and foreign investment markets continue to seesaw, financial experts advise that there’s only one good option, uncomfortable as it may seem: Ride out the storm."

"'At the present time, there are not a lot of good options available to individuals to protect themselves from this decline,' said Baylor University economics professor Kent Gilbreath, who was a member of the Federal Reserve Bank of Dallas board of directors from 1979-1986."

"'Perhaps an analogy would be best here: passengers on an airplane that is losing altitude. There is nothing the passengers can do except buckle their seat belts and hope that the drop in altitude ends,' he said."

"Gilbreath and other economic experts say they have seen this economic struggle on the horizon for some time, but many were caught off-guard."

"'It’s not a good time,' said Gilbreath, who presented a paper at the Western Economics Association’s international meeting in July titled 'The Coming Perfect Economic Storm.' 'I’m normally a very optimistic person and, while I expected a serious economic challenge, this financial crisis has caused a financial decline earlier than I anticipated. I didn’t think it was likely to come until about 2010...The nation wasn’t prepared for it now.'"