Some housing bubble news from Wall Street and Washington. Reuters, "Prices of existing single-family homes slumped for the 18th month in a row in January, for a record annual drop, according to Standard & Poor's/Case-Shiller home price index released on Tuesday. The composite month-over-month index of 20 metropolitan areas fell 2.4 percent to 180.65 from December, bringing the measure down 10.7 percent from a year earlier and 12.5 percent from its July 2006 peak."

"'Unfortunately, house prices continue to decline and the decline continues to be really nationwide,' said David Blitzer, who chairs S&P's index committee."

"'The weakness is not contained to the bubble areas,' said Michelle Meyer, an economist at investment bank Lehman Brothers in New York. 'It has spread to the rest of the nation.'"

"House price depreciation accelerated in February, according to FBR analyst Michael Youngblood, citing data from data provider LoanPerformance."

From MarketWatch. "Home prices in 10 of the 20 cities have fallen at double-digit rates in the past year. 'No markets seem to be completely immune from the housing crisis,' said Blitzer."

"For the past year, the biggest price declines have been in Miami and Las Vegas, both down 19.3%. Two cities that had continued to see price increases last year -- Seattle and Portland, Ore. -- turned negative in January."

"Two large banks — Industrial & Commercial Bank of China and Bank of China — posted higher fourth-quarter profits on Tuesday, but the state lenders were hurt by holdings in subprime-related securities in the United States."

"Bank of China, hardest-hit among the country’s big banks by subprime exposure, said it held $5 billion in asset-backed securities at the end of 2007, or 2.13 percent of its investment securities, and booked $1.58 billion in provisions and markdowns on the holdings."

"Industrial & Commercial Bank said it held subprime-backed securities worth $1.23 billion at the end of December 2007 and booked $400 million as an allowance for potential losses on that portfolio."

From Bloomberg. "Bank of China's market value has dropped by $83 billion since it announced $7.95 billion of subprime-related holdings on Oct. 30, making it Asia's biggest casualty of the U.S. mortgage market collapse."

The Globe & Mail. "When you add it all up, the commercial paper in Canada's frozen $32-billion market has lost more than 40 per cent of its face value because of market conditions, according to RBC Dominion Securities analyst André-Philippe Hardy. Hardy based his estimate on court documents that were recently made public."

"He believes that a further $3-billion portion of the market that's tied to U.S. subprime is probably worth about 20 per cent."

The San Francisco Chronicle. "In one of the more spectacular meltdowns in mutual fund history, Schwab YieldPlus - marketed as a higher-yielding alternative to money market funds - has plummeted to just $2.5 billion in assets from more than $13 billion in May."

"The shrinkage reflects both a decline in the fund's asset value and a mass exodus by investors. Schwab YieldPlus is not the first but is by far the largest ultra-short-term bond fund to run into trouble as a result of its exposure to subprime and other mortgage-backed securities. As of December, it had about 46 percent of its assets in mortgage-backed securities."

"Marc Itzkowitz, a software product manager in Palo Alto, invested more than $100,000 in the fund, starting in summer 2005, to put toward a down payment on a house."

"'My forecast was, toward the end of the decade there would be a fall in real estate. I'm a renter. I wanted to park money in something that would be safe so when prices declined, I'd have my payment preserved,' he says."

"Itzkowitz really started worrying about the fund in February, but didn't sell until last week, when his adviser told him to get out. Itzkowitz lost 17 percent, or about $23,000, enough to impact his home-buying plans."

"He takes part of the blame himself. 'It's my bad. You should never believe you can get higher yields without any risk,' he says."

The Wall Street Journal. "Foreclosures are occurring at the highest rate in decades -- and as a result, lenders are acquiring homes faster than they can sell them off. Last year, sales of foreclosed homes rose just 4.4%, while the supply more than doubled, according to First American CoreLogic."

"On Lagrange Street in the city of Worcester in Massachusetts, two brick apartment buildings stand side-by-side in varying stages of decay -- boarded up, 'No Trespassing' signs affixed, paint peeling."

"Across the street, a condominium complex is on the brink. Three of its eight apartments are in foreclosure."

"Like many cities in the United States where the home vacancy rate has scaled its highest since records began in 1956, the former textile mill city of Worcester in Massachusetts is turning to the courts to fight back."

"In western New York, the city of Buffalo filed a lawsuit on February 21 against 36 lenders -- including big names like JPMorgan Chase & Co Inc and Countrywide Financial Corp -- who were involved in 57 foreclosures that led to properties being abandoned and ultimately demolished by authorities."

"Alisa Lukasiewicz, who runs the city's law department, said Buffalo drew inspiration from similar lawsuits in Cleveland and Baltimore. 'These properties are in a state of legal limbo,' she said. 'Banks walk away. The homeowners are gone, and the property is still there.'"

"In some cases, mortgage companies threaten foreclosure if borrowers fall behind in loan payments but never go through with it, leaving the borrower technically the property's owner and complicating efforts to revive an abandoned home."

"'Another big problem we have had is this new wave of lending,' said Cindy Cooper, a Buffalo city prosecutor who specializes in housing. 'It's difficult to work out who holds the note, who is in control of a property. These mortgages have been packaged into portfolios and sold on Wall Street.'"

"'Because of the foreclosure crisis we are seeing this incredible glut of inexpensive distressed houses being sold at pennies on the dollar,' Cleveland city councilman Tony Brancatelli said in a telephone interview."

"'The mortgage companies don't want to hold onto them so they are dumping them on the Internet at a rapid rate. People are buying them 15 to a 100 at a time,' he added."

The Boston Globe. "While Hillary Clinton and others are offering government help for homeowners facing foreclosure, John McCain is more about tough love."

"The presumptive Republican nominee, in a speech today in Santa Ana, Calif., blames the housing and credit crisis on a 'bubble' created by lenders who lowered their standards, Americans who bought homes they couldn't afford, and financial players who invested in complex securities that were not transparent."

"'I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,' he said."

"In our effort to help deserving homeowners, no assistance should be given to speculators,' McCain continued. 'Any assistance for borrowers should be focused solely on homeowners, not people who bought houses for speculative purposes, to rent or as second homes. Any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren’t.'"

"He then called for homeowners to be required to put down payments on homes, for lenders to raise standards, and for all those involved to move to more transparency."

"'They've been asking the government to help them out,' McCain said of lenders. 'I'm now calling upon them to help their customers, and their nation, out.'"

"'I will not play election-year politics with the housing crisis,' he said."

"McCain said lenders became complacent as housing prices continued to rise, lowering their standards and lending money to people who couldn't pay it back. Some consumers, he said, bought homes they couldn't afford, betting they would reap the benefits later of higher home prices."

"Meanwhile, he said, the housing market lacked accountability and transparency, and 'the initial losses spawned a crisis of confidence in the markets.'"

The Baltimore Sun. "Baltimore and the five surrounding counties saw an even steeper falloff in sales from a year earlier, down 33 percent. Prices are higher here than in the nation as a whole, and haven't been dropping as fast."

"Lawrence Yun, chief economist for the National Association of Realtors, suspects that some local buyers 'are just waiting it out to see how much prices decline' while others are holding off because they can't afford to buy."

"'A price drop would help that picture,' Yun said."

The Review Journal. "Billy O'Keefe recognizes that real estate agents rank among the least-respected professionals on the planet."

"For one thing, the barrier to entry is low. Because it's relatively easy to get a license, you have the 'stripper/Realtor' and 'plumber/Realtor,' said O'Keefe, who recently opened O'Keefe Casto Residential Brokerage in Las Vegas."

"Realtors get paid the same commission when they close a transaction no matter how good or how bad they were at the job, he added. O'Keefe is operating under a different business model at his brokerage, one that holds agents accountable for their competency and guarantees money-back customer satisfaction."

"'Our guarantee states that if you're not happy and don't think we earned our money at closing, we will not charge you,' O'Keefe said. 'It's risky. We've got brokers who think we're out of our minds.'"

"O'Keefe Casto is recruiting real estate agents at a time when other brokerages have laid off staff or closed the doors. Their office was formerly occupied by Century 21 MoneyWorld. Mike West, president of Century 21 MoneyWorld, said he's had to shut down two of his four offices and reduce staff to 250 from a peak of 357 agents."

"'Us and every other company,' he said. 'Liberty (Realty) closed three out of their four offices. You've got some in bankruptcy. Several ReMax offices have closed or merged.'"

From Marketplace. "Realtor Martha Ann Wishnev hasn't cut many deals since home sales dropped nationwide. Rachel Dornhelm reports. Dornhelm: 'Martha Ann Wishnev has been a realtor for 30 years. She works in Contra Costa County, near San Francisco.'"

"Martha Ann Wishnev: 'I ordinarily sell about $7.5 million worth of real estate a year. And here it is, it's the beginning of February. I haven't had a sale yet.'"

"In fact, she hasn't been involved in a transaction since October. Around the nation, realtors like Wishnev have seen sales drop 22 percent over the last year. Wishnev says she's busy sending out documents, talking to homeowners associations and potential clients. She says the fact she hasn't sold anything is taking a psychological toll."

"Wishnev: 'In real estate, you don't get a penny until you close the escrow. So you spend a lot of money on advertising, a lot of money taking people around and you have to remind yourself that you personally are not a failure, that the real estate market is the problem.'"

"Wishnev is lucky. Her husband has a steady salary. But, she says, others must be in agony. She's noticed the energy level drop at her office and empty desks."

"Wishnev: 'What happens is when someone decides to really pack it in, they just disappear. Where did he go? Well, he's gone. What happened? I don't know. It's odd.'"