Some housing bubble news from Wall Street and Washington. CNN Money, "The new year picked up where 2007 left off, as sales of existing homes fell in January to the lowest level in nearly a decade, according to the National Association of Realtors. The reading was the lowest since the group began reporting annual sales pace in 1999, down 23.4% from a year earlier. The median price of a home sold during the month fell 4.6% to $201,100 from $210,900 a year earlier. Before the start of the current housing slump, it had been 11 years since prices fell compared to a year earlier."

"The median price of a single-family home dropped to the lowest point since February 2005, falling 5.1% to $198,700."

The Wall Street Journal. "Inventories of homes increased 5.5% at the end of January to 4.19 million available for sale, which represented a 10.3-month supply at the current sales pace. There was a 9.7-month supply at the end of December, revised from a previously estimated 9.6 months."

"'Inventories are high, so it's not surprising prices are declining," NAR economist Lawrence Yun said."

From MarketWatch. "UBS may be facing legal action from a German firm that bought into a $500 million portfolio of collateralized debt obligations that the Swiss investment-banking giant structured and sold. HSH Nordbank said in a statement on Sunday that it 'has decided to start legal proceedings against UBS.'"

"The claim would aim to recover "significant losses" on the CDOs, which were linked to the U.S. mortgage market, the company said."

"The legal action would aim to show that the 'manner in which the investments were sold to HSH Nordbank and UBS's subsequent management of the assets were clearly contrary to our interests,' the firm said."

From Reuters. "HSH Nordbank's decision to sue Swiss bank UBS this week may be the vanguard of many investor lawsuits against banks over investments in collateralised debt obligations (CDOs) that have gone sour."

"The German state-controlled bank said on Sunday it would start legal proceedings against UBS to recover losses on a $500 million investment in a CDO made in 2002."

"'The question focusses on how the CDO was managed? Did UBS put assets it didn't want into this structure?' said Tom Jenkins, an analyst at Royal Bank of Scotland. This case 'could pave the way for many more suits against it (UBS) and others,' he wrote in a note to investors."

The Boston Business Journal. "A $517 million debt vehicle backed by risky subprime mortgages and issued this past summer by Fidelity Investments has run into trouble after credit ratings on some of the securities have been cut to junk status. The mutual fund giant has more than $1 billion in exposure to collateralized debt obligations."

"The Boston company created that little-known affiliate, Ballyrock Investment Advisors LLC, to issue and oversee collateralized debt obligations. The timing of Ballyrock's subprime-related CDO issue could not have been worse. Since then, Wall Street firms have reduced the value of their CDOs by as much as 80 percent in some cases."

"Ballyrock manages five CDOs, but only one has been subject to negative ratings actions and is linked to subprime mortgages, said Fidelity spokeswoman Anne Crowley."

"One glimpse of the strain from Fidelity's CDO issue comes from asset manager AllianceBernstein, which cut by 30 percent the value of $1.23 million in securities purchased for its Balanced Shares Fund from the Ballyrock CDO, U.S. regulatory filings show."

"The papers that U.S. borrowers sign when buying a house are piled so high that few people read them all, and even fewer absorb the information."

"Critics of the current documents say it is time to require home mortgage lenders to prepare a short, plain-English summary of each loan so consumers actually know what they are signing. Many in the housing industry agree."

"Richard Syron, CEO of Freddie Mac, the second-largest U.S. home funding company, told Reuters last week he also worries that consumers do not always understand pitfalls hidden in their mortgage details."

"'I've refinanced a few times, and I can't say I read a fifth of the 75 pages before signing them all,' said Syron. 'We've just got to do a much, much better job of being sure that the consumer knows what they're getting.'"

"Lawmakers are among those who have failed to read their mortgage details and are interested in making them easier to absorb. Sen. Charles Schumer told Reuters he trusted his bankers when he signed for the loan on his house. 'Like most people, I didn't read my loan document in the one mortgage my wife and I signed 25 years ago.'"

"Sen. Charles Grassley, of Iowa, also said he did not read his mortgage documents but thinks simpler disclosure could be achieved without legislation. 'The consumer ought to know as much as the bank knows,' he said. 'I bet you don't need to change the law to do it this way.'"

"Rick Farr, partial owner of United Capital Mortgage Assistance, firmly believes that inadequate information hurt many of the people who call his company for help in preventing foreclosure."

"In many cases, when lawyers, real estate agents, buyers and sellers gather to close on a sale, the terms of the loan were such that 'the only people at that table who didn't think there would be a problem with the loan was the (new) homeowners,' he said."

The Des Moines Register. "About 10 percent of 1,530 lending-related complaints to the Iowa Division of Banking over the last 10 years have been against mortgage brokers. Six of those were against Iowa Mortgage & Consulting, where Joseph P. Kedley, worked."

"Carol Vaughn, who is wheelchair-bound and suffers from a variety of health problems, said Kedley promised to save her money with a fixed-rate loan. That's what she thought she was getting when she signed the papers."

"Instead, she received a $72,000 loan at 11 percent interest that is scheduled to adjust next year, and a second mortgage for about $17,000 with a 13 percent fixed rate."

"'He told me that I was going to save so much money that he was going to get an award from the governor for saving me so much on interest,' she said."

"She did get $5,000 in cash to help pay off her credit card bills, but her monthly payments went from about $500 to $800. Her loan is based on an appraised value of $94,000 - a figure from an appraisal she never saw. The house was valued at $40,000 when she recently paid to have her home reappraised."

"'I thought he was being straight with me. I didn't think someone would try to cheat me,' Vaughn said."

The Chicago Tribune. "The new buyers of a rundown graystone on the South Side showed up Jan. 9 to look at the house they won at a foreclosure auction. They took the plywood off the front door and went inside to make sure the utilities had been shut off. Then they called the police."

"Sitting upright in the corner of a bedroom off the kitchen was a human skeleton in a red tracksuit. Neighbors told police the corpse was almost certainly Randy Johnson, a middle-age man who lived alone in the North Kenwood house."

"The cause of Johnson's death has not yet been determined, but it is just one of the mysteries about 4578 S. Oakenwald Ave. Somehow, Johnson's house was transferred three times to new owners without anyone noticing he was inside."

"Left holding the bag is Countrywide Home Loans, the nation's largest mortgage lender. Now it is likely to lose it all because it financed the sale of a home whose rightful owner was in no condition to sell."

"The intrigue surrounding the Oakenwald house offers a glimpse into the strange and murky world of mortgage fraud. Lenders duped into making loans have every incentive to unload the properties, and almost none to blow the whistle on wrongdoers."

"'They foreclose. They don't care. They just foreclose,' said Daniel Lindsey, a supervisory attorney with the Legal Assistance Foundation of Metropolitan Chicago."

"Last week, Countrywide vacated the recent sale of 4578 S. Oakenwald and returned the buyer's money. That happened only after Cook County officials announced they would fight to put the house back in the Johnson family's name."

"Countrywide Financial Corp., reacting to negative publicity, canceled plans to host a posh ski trip for about 30 mortgage bankers at the Ritz-Carlton Bachelor Gulch ski resort in Avon, Colo., a spokesman said."

"The three-night event – for smaller mortgage banks known as 'correspondents' that sell home loans to Countrywide – was to include two four-hour business meetings along with skiing and dinner at upscale restaurants, including the Spago restaurant, whose menu includes Kobe steak with wasabi potato puree for $105."

"Rising defaults and falling home prices led to losses of about $1.6 billion at Countrywide in the second half, and the company has reduced its work force by 11,400, or 19%, since July. Countrywide's servicing arm, which collects payments and handles other administrative tasks, has about 90,000 loans in foreclosure, or 1% of the total."

"Sen. Charles Schumer...denounced the planned ski outing last week. 'Let me get this straight: Countrywide is too cash-strapped to prevent layoffs, refinance borrowers or ward off bankruptcy without help from Bank of America, but it can afford a posh junket for its co-conspirators in the subprime mess?' Sen. Schumer said in a written statement. 'This brings new meaning to 'snow job.'"

"Andrew Gissinger III, Countrywide's executive managing director, residential lending, was to have been among the hosts of the ski trip. In a memo to staff last fall, Mr. Gissinger urged employees to hang in there despite the current slump: 'I've made a lot of people rich or richer who have joined me on my past crusades.'"

"The correspondent lenders account for a big portion of Countrywide's business. In last year's first nine months, Countrywide bought about $151 billion of home loans originated by hundreds of correspondents across the country. In the same period, Countrywide originated $173 billion of loans through brokers and its own employees."

"With the industry in turmoil and many small lenders going bust, Countrywide may feel the need to cheer up the correspondents. Some such lenders say it has become very difficult to sell their loans to Countrywide because the company has grown much pickier and is rejecting as overly optimistic more of the appraisals that back those loans."

"An agenda for the canceled meeting noted that falling house prices and 'skyrocketing delinquencies' have created a 'new world' in which 'loans are being examined with the utmost scrutiny.'"

"The agenda said participants were to discuss quality control, among other topics."

From CBS News. "Countrywide CEO Angelo Mozilo has come under fire for scheduling (the) lavish retreat. 'Of all the acts of corporate stupidity, this takes the cake,' Sen. Charles Schumer told CBS News. 'They only nixed it after they were caught with their hand in the cookie jar.'"

"On Thursday, the House Committee on Oversight and Government Reform will scrutinize the compensation and retirement packages of one chief executive and two recently deposed CEOs of companies ensnared in the mortgage crisis."

"The witness list includes: Angelo Mozilo of Countrywide Financial Corp., the nation's largest mortgage lender; Stanley O'Neal, formerly of Merrill Lynch & Co.; and Charles Prince, formerly of Citigroup Inc."