Some housing bubble news from Wall Street and Washington. Philadelphia Inquirer, "Radian Group Inc., a Philadelphia insurer of mortgages and bonds, said yesterday that it lost $618 million in the fourth quarter as the credit condition of American households worsened. Claims paid for mortgage defaults more than doubled in the quarter to $164.67 million from $81.14 million in the 2006 quarter. The increase included prime mortgages, which climbed to $53.2 million from $28.9 million."

"Those payments are expected to reach $200 million in the current quarter and $1 billion for all of 2008, C. Robert Quint, Radian's chief financial officer, said during a conference call. The company threw out its September projection of $2.16 billion in cumulative losses on mortgage defaults."

"'We now believe that losses will exceed those projections, although it's unclear to us at this point by how much given the prevailing uncertainty in the market,' Quint said."

From BBC News. "Credit Suisse has suspended a 'small number' of traders suspected of inflating the value of mortgage-backed bond investments by $2.85bn (£1.5bn). The Swiss firm blamed pricing errors for its actions, which would cut $1bn from expected first-quarter profit."

"It also blamed 'adverse market conditions' for the write-down."

"Tuesday's revelations by Credit Suisse stunned many analysts because they came a week after the Zurich-based firm posted its results for the last three months for 2007. At the time, it reported minimal damage from the US sub-prime crisis, with losses of 2bn Swiss francs ($1.8bn; £938m) last year, less than it had originally expected."

From Reuters. "Barclays Plc, Britain's third-biggest bank, raised its 2007 writedown on the value of risky assets to 1.6 billion pounds ($3.1 billion). The bank said its exposure to collateralized debt obligations stood at 6 billion pounds before hedging, while its exposure to Alt-A mortgages rose to 4.9 billion and its exposure to U.S. monoline insurers totals 1.3 billion."

The Daily Express. "Gordon Brown is under intense pressure to sack Alistair Darling after the 'disaster' of Northern Rock’s nationalisation. Northern Rock shareholders were also outraged after being that told their holdings have been made virtually worthless by the state takeover."

"City analysts warned that investors will get virtually nothing. Sandy Chen, of investment firm Panmure Gordon, said: 'Shareholders will want to see some money out of their investments but the financial reality is that they are likely to get nothing.'"

"Ministers opted for nationalisation after failing to reach a deal for a private takeover. Plans for potential sales to Sir Richard Branson’s Virgin Group or Northern Rock’s management team both collapsed."

"A statement from Mr Branson said: 'We believe that nationalisation is not the right answer and that a commercial solution would have been the best way forward.'"

"Details of the nationalisation were rushed out yesterday and will be debated in the Commons today. Mr Darling faced rowdy scenes in the Commons. Shadow Chancellor George Osborne told him he had taken Britain back to the failed policies of Labour’s past."

"He added: 'We can safely say you will never recover your reputation for competence. You are now politically a dead man walking and if the Prime Minister could actually make a decision he would move you.'"

The LA Times. "After years of watching house prices soar even faster than those in America -- modest three-bedroom tract houses in the London suburbs were going for $2.2 million at one point -- Britons are now weathering a sharp rise in mortgage defaults."

"Repossessions -- the British term for foreclosures -- jumped 21% last year, with filings against more than 27,000 homes, according to the Council of Mortgage Lenders."

"'There is potentially a huge number of people who may be in difficulties,' said Adam Sampson, director of a nonprofit group that counsels homeowners seeking to avoid losing their houses to debt. 'So many of the people we see are husbands and wives who have borrowed against both their incomes. A substantial number have never had to verify their income to their lender.'"

"Dawn Newbury, a mother of three in Cardiff, Wales, saw her payments rise from $1,510 a month to nearly $2,000 when her sub-prime loan's interest rate reset. The lender immediately sought repossession when she fell behind. Newbury won a reprieve in court, but was hauled back when her payment fell $40 short of the minimum."

"Newbury found another sub-prime lender who paid off the first. She is now on an interest-only loan at $1,500 a month, which will soon go up to $1,910."

"'And then the whole cycle's going to start all over again,' she said. 'They're vultures, I'm telling you. They give you the money because they know you're going to default, and they know they've got a lovely house coming out of it.'"

The Providence Journal. "A nationally recognized housing expert from Harvard University asserts that the federal government has 'underreacted' to the alarming rise in home foreclosures across the country."

"Nicholas P. Retsinas, director of Harvard University’s Joint Center for Housing Studies, said the initiative announced last week by the Bush administration to grant some homeowners threatened with foreclosure a 30-day reprieve is like a 'a stay of execution, but it’s not a pardon.'"

"'Our government, particularly at the federal level, has underreacted to this market,' Retsinas said before a group of about 60 people. 'It’s a problem that calls for a very rapid and extensive government solution.'

"Retsinas’ remarks came during a forum titled 'Lost Homes: Tip of the Iceberg?' In Rhode Island, '10 homes a day' begin the process of foreclosure, Retsinas said."

"The 'epidemiology' of foreclosures 'looks like cancer,' said The Providence Plan’s Bruce Boucek., pointing to maps of Providence with colored dots indicating the spread of foreclosures."

"Consider the demographics, Boucek said, and the questions multiply. In the West End, 36 percent of the residents fall below the federal poverty level, according to the 2000 census. The neighborhoods showing highest concentrations of foreclosures are the same neighborhoods where more than half of the residents are minorities, most of them Hispanic."

"'Why were all of these people sold mortgage products in the first place?' said Boucek."

The New York Times. "The mortgage market may be in a historic upheaval, but mortgage companies continue to pump out upbeat advertisements."

"Countrywide Financial brags in its ads that 'No one can do what Countrywide can' and that 'Countrywide can show you the way home.' Wachovia ads feature an 'Approved' stamp prominently at the top, and Bank of America says, 'Homeownership is the best medicine.'"

"Also, the National Association of Realtors is running national television ads saying there has never been a better time to buy a home. Home values nearly double every 10 years, the commercial claims, showing a young couple walk up to their white colonial-style home."

The Associated Press. "Regulators are trying to punish Wall Street for mortgage finance practices that expanded home ownership and spread risk among a host of new players — but also may have duped borrowers and investors who supplied cash to fuel a housing boom that's turned bust."

"A handful of state securities regulators and a couple foreclosure-blighted cities have fired the opening shots with lawsuits trying to prove that investment banks and big lenders are guilty of more than just bad business decisions and failing to foresee looming mortgage troubles."

"Aside from the civil cases, the FBI is looking at possible criminal action, focusing on what Wall Street firms knew about the risks of mortgage securities backed by subprime loans, and whether they hid risks from investors."

"States have responded by tightening rules governing how lenders and brokers arrange mortgages and are compensated. But lawsuits and administrative complaints are the main tools regulators use to seek fines against companies accused of wrongdoing, or to set examples to deter bad behavior."

"'What they can't enforce through regulation, they will try to accomplish through suing,' said David Bizar, a Hartford, Conn.-based attorney who defends against subprime mortgage lawsuits brought by consumers and regulators."

"In the rush to sue big business, there's plenty of blame to go around in the subprime meltdown, said Bizar. But the mess can be blamed more on unrealistic expectations than fraud, he said."

"'You had a lot of people reaching to get into homes they couldn't afford, on the theory that it would go up in value,' Bizar said."

"It is confession season for the world's big banks as they complete 2007 results and try to account for the full scale of the subprime credit upheaval that threatens to stall the global economy."

"Over the next two weeks, most major U.S. banks will file annual reports with the U.S. Securities and Exchange Commission, and several of Europe's biggest financial companies will release 2007 earnings statements."

"For some, it will be the first audited reckoning of how badly they were hurt by the market turmoil that began with defaulting on U.S. subprime mortgage loans."

"Kenneth Rogoff, an economics professor at Harvard University and former chief economist of the International Monetary Fund, said write-offs related to the subprime problem were just the beginning."

"'We haven't by any means seen everything,' Rogoff said. 'If it were just the subprime debt, it wouldn't be so bad. We're just entering the recession, so the defaults are just beginning.'"

"Rogoff recently co-wrote a paper comparing the current banking troubles to five of the biggest financial crises of the 20th century, including Japan's 'lost decade,' which began in 1992. He found that the current U.S. housing-fed crisis was following a strikingly similar pattern."

"The crises were marked by swift rises in asset prices, mounting debt and steep current account deficits. The rise in the U.S. housing market from 2003 to 2006 was even steeper than the average asset price rises in the other five crises."

"Full disclosure is a critical step in the restoration of global markets to good working order. That was the point hammered home earlier this month when finance leaders from the Group of 7 rich nations met in Tokyo."

"'We need to keep encouraging our financial institutions to recognize their losses, let the market work and raise capital,' Treasury Secretary Henry Paulson told the U.S. Congress on Thursday."

From WKRN.com. "While the cheaper prices may be good for newcomers, it is bad news for the hundreds of residents who moved to The Hills at Concord Place in the past year. Some residents want Centex to either sell the new houses at the market price they paid or refund the difference."

"Resident Joe Calvert said, '[It] kills resale. If you're a person who wants to refinance a mortgage you wouldn't be appraised at the level you owe.'"

"Through email, a spokesperson for Centex wrote, 'Lower prices are necessary to sell homes in the current business environment. We don't control market conditions and pricing is a significant issue nationwide, not just in one neighborhood.'"

"In fact, across Middle Tennessee, home builders are going to extreme measures to get home buyers to purchase their homes."

"Pramod Panasa bought his home in the Southern Home Builders’ subdivision in January of last year, before builders rolled out the big deals. That, he said, is part of the real estate gamble."

"'Right now, I’m sure there are better deals out there, but right now I’m not thinking about it,' he told News 2."