Some housing bubble news from Wall Street and Washington. Reuters, "WCI Communities Inc, which builds high-end homes, said it expected to record a pre-tax, fourth-quarter loss in the range of $410 million to $460 million partly due to the hard-hit Florida housing market. The U.S. company said the loss includes impairment charges of about $335 million to $350 million for lower value of land, unsold homes and apartments, abandoned option deposits and goodwill write downs."

"The company also said it would recognize a $38 million reserve for Oceanside, a Florida high rise, because of a high number of buyers who walked away from deposits."

From MarketWatch. "French bank Credit Agricole swung to a fourth-quarter loss of 857 million euros ($1.3 billion) following a $5 billion write-down. Analysts cautioned there could be more write-downs on the way as the bank still has some residual exposure to struggling bond insurers and its impairment assumptions for certain mortgage-related investments appear less conservative than those of peers."

"Utrecht-based Rabobank, one of the largest retail banks in the Netherlands with more than 9 million clients, said it booked a loss of 284 million euros on investments in residential mortgage-backed securities (RMBS) and other investments whose risks have recently become more exposed."

"Rabobank reiterated that it had no direct exposure to subprime mortgages that were made to risky home borrowers who were later unable to pay."

From The Age. Rising costs of funding loans resulting from the US subprime-induced credit squeeze have forced Macquarie Bank to wind back its $23 billion domestic residential mortgage business."

"Macquarie Securitisation makes its money by packaging the loans and selling them to investors as bonds. Macquarie had been paying significantly over the bank bill rate to stay in the business."

From Bizjournals. "JPMorgan Chase & Co. will not extend the 30-day moratorium on foreclosures it backed last month as part of President Bush's plan to minimize the housing downturn, CEO Jamie Dimon said. That moratorium is set to expire in the middle of March."

"The New York financial giant has written down more than $3 billion in the past two quarters. Dimon expects more to come, as Chase still holds some $50 billion in 'risky assets,' he said. 'We made some mistakes,' he said to the more than 750 luncheon attendees."

Dow Jones Newswires. "Robert Sheridan, president at Robert Sheridan & Partners, comments on the Dow Jones Newswires story 'Fueling Housing Decline, Lenders Retreat From Tough Markets.' 'These steps by lenders may seem cynical, but they are necessary to avoid 'catching a falling knife' by making loans when prices are expected to drop a lot further. This is tacit confirmation of what we have been saying for months.'"

"1. There needs to be a significant price correction to bring this market into balance. 2. The worst is yet to come in housing prices. 3. Losses on existing loans will be much greater than is generally expected."

"Lenders including BankUnited and a wholesale lending unit of Wachovia Corp. have elected not to lend to some areas or properties because of declining prices. Other lenders have tightened underwriting guidelines for slumping markets so as to make financing nearly unattainable."

"'We don't call it blacklisting,' said an official at a large bank. 'We just don't write the loan."'

"As U.S. regulators reflect on lessons learned from the subprime mortgage crisis, the Federal Reserve admitted on Tuesday it should have been more forceful with the banks it supervises."

"'One of the lessons learned is that we need to be more forceful,' said Fed Vice Chairman Donald Kohn when pressed by Sen. Richard Shelby to explain why bank regulators did not spot subprime mortgage problems earlier."

"'We did not perform flawlessly. I absolutely agree with that,' Kohn said, adding that the Fed was conducting an internal review of what it should have done differently. Asked by Shelby if the Fed was afraid of the banks that it supervises, Kohn responded: 'No.'"

"'Through public speeches and private meetings with bank representatives over years, the Fed tried to warn banks about their exposure to risky subprime mortgages before they exploded into the current crisis, Kohn said."

"'That might not be the most effective way to make a point.' said Jack Reed of Rhode Island. 'I have to ask questions about the culture of regulation at the Fed.'"

"The hearing provided a glimpse into how the Fed, which is most known for its role as the powerful U.S. central bank, communicates with individual banks it supervises. 'A lot of people believe the Fed was asleep at the switch,' Shelby said."

"Kohn defended the Fed, saying it was 'a very hard sell' for the Fed to get banks to focus on potential risks when the U.S. economy was booming and banks enjoyed record earnings. The Fed supervises about 5,000 bank holding companies with consolidated assets of about $14.2 trillion and 870 state member banks with more than $1.5 trillion in assets."

"'It's a hard sell for the banks, yes, but you're the supervisor,' Shelby responded impatiently. 'You're also the central bank, so you have not just a little bit of power, but a lot of power.'"

The Associated Press. "'The problems in the mortgage and housing markets have been highly unusual and clearly some banking organizations have failed to manage their exposures well and have suffered losses as a result,' said Kohn."

"Under questioning from Sen. Richard Shelby, Kohn acknowledged that the Federal Reserve did not anticipate hefty mortgage-market losses. 'I don't know that we fully appreciated all these risks out there.' Kohn said. 'I'm not sure anybody did.'"

"As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light. Many fraud schemes kept running as long as cash kept flowing from Wall Street. Once the credit crunch turned off the supply of easy money, the perpetrators simply walked away."

"Arthur Prieston, chairman of the Prieston Group, which provides mortgage-fraud insurance and training to lenders, said that 'at least 30 percent of the loans out there contain some form of misrepresentation.'"

"'But because lenders often have to sell off properties quickly to cut their losses, we will never know exactly how much mortgage fraud has been committed,' he added."

"Prieston estimates that mortgage-fraud losses were around $4.2 billion for 2006, adding that figures for 2007 'will be much higher.' Prieston said that had major lenders been proactive in checking the identities of the people who were buying properties using stated-income loans and similar products, then a lot of fraud could have been avoided."

"'A lot of lenders claim they were victimized by fraud but helped to constitute it by looking the other way,' he said."

"In a recent case in Chicago, he said the authorities prepared to file charges against a woman who had fraudulently bought five properties. 'When we turned up to serve papers on her, we found she was 9 years old,' he said. 'Her uncle had stolen her identity.'"

"'The vast majority of the cases I'm aware of involved straw buyers,' said according to Boston-based real estate analyst John Anderson. 'Thanks to products like stated-income loans, people walked away with a ton of free money.'"

"Anderson is among those who were warning for years that easy credit created an easy climate for fraud. 'The banks on Wall Street had to know there would be fraud. If they didn't they're morons,' he said."

From USA Today. "As housing prices continue to fall, real estate agencies are responding with a marketing onslaught to try to entice reluctant shoppers to get off the fence and buy."

"'The theme now is that's it's a great time to buy,' says David Rea, chief creative officer for RE/Max, who directs its advertising."

"It's not such a great time to be in his business, however."

"'We had an incredible run for the past five years,' Rea says. 'A lot of it had to do with lower interest rates and probably the subprime. It was one of the most productive real estate markets ever. But it can't go on forever, and everybody knew something was going to happen.'"

The Boston Herald. "Boston Federal Reserve senior economist Alicia Sasser and Lawrence Yun, the National Association of Realtors’ chief economist, told a real estate conference in Cambridge that while Hub housing remains depressed, the market has already planted the seeds of a turnaround."

"'Probably the worst for the Boston housing market is over,' Yun said. 'It’s possible that we might see a notable rise in home-sale activity in the second half, or we might just see more of a stabilizing, no real major change up or down.'"

"Still, Sasser and Yun say burgeoning home foreclosures, a big backlog of unsold properties and other problems continue to hurt the Hub."

"Yun thinks the biggest factor holding the market down involves buyers who hang back because they think prices might fall further. 'Will (the market) decline further from this point?' the economist asked. 'Yes - if the buyer remains pessimistic. Buyer pessimism can be self-fulfilling.'"

The Leader Post. "The Regina real estate market continues to fire on all cylinders, according to a report released by the Association of Regina Realtors on Tuesday. And the market doesn't look like it will be cooling off anytime soon, said Gord Archibald, the association's executive officer."

"'Assuming the economy continues to do well (and) generates jobs (and) attracts newcomers and expatriates back to the city, we're going to continue seeing high levels of demand,' he said. 'It'll take some time for the supply side to catch up to that,' he said."

"The average price of all residential properties sold last month was $204,459, while the average price for single-family-detached homes was $221,717. In February 2007, those figures were $132,519 and $136,991, respectively. That represents year-to-year price gains of 54.3 per cent for all residential properties and 61.8 per cent for single-family-detached homes."

"But just how many more dollars are changing hands is ...'staggering,' according to the association. Last month was the 13th-straight month of record-setting home sales in Regina, the report said. But homes aren't just selling for more money these days, they're also selling a lot faster."

"'The prices just keep on going up, even in the traditionally slower months,' Archibald said."

"Archibald also warned against first-time home buyers trying to wait out Regina's hot real estate market. 'Get into the market early,' he said. 'Prices are likely to go up and the earlier you get in, the greater the chance you'll find a home that fits your needs.'"