Some housing bubble news from Wall Street and Washington. AP, "A reading of U.S. homebuilders' sentiment remained unchanged in April, just shy of its record low for the third consecutive month as the housing market failed to recover. The National Association of Home Builders said Tuesday its housing market index came in at 20 this month, the third-lowest reading on record. Index readings higher than 50 indicate positive sentiment. The index has been at 20 or below since September, and below 50 since May 2006."

"The builders' group's chief economist, David Seiders, says the housing slump has pushed the economy into a 'mild recession.' The trade group has been pushing aggressively on Captiol Hill for legislation, such as a temporary tax credit for home buyers, arguing that doing so could stem the housing downturn."

"'Measures that stimulate consumer confidence in the housing market, push the fence-sitters into the ring and put a floor under house prices can successfully halt the drag that housing is exerting on the national economy, and help stabilize financial markets at the same time,' Seiders said in a statement."

From Reuters. "The unsettled U.S. mortgage and housing markets mean that Fannie Mae and Freddie Mac remain exposed to serious risks, their federal regulator said on Tuesday. 'Both companies remain classified as significant supervisory concerns,' the Office of Federal Housing Enterprise Oversight said in its annual report to Congress."

"'The extraordinary declines in the housing and mortgage markets have greatly increased their credit and interest rate risks,' OFHEO director James Lockhart said in a letter to lawmakers."

From MarketWatch. "The performance of government-sponsored enterprises like Fannie Mae and Freddie Mac could have a direct impact on the national economy and more importantly, the credit standing of the U.S., Standard & Poor's said Monday."

"Fannie and Freddie, which enjoy implicit government guarantees, could cause the U.S. to lose its sterling triple-A rating if the government were forced to come to their rescue, the ratings agency said in a report."

"'Even though...credit damage from GSEs is unlikely, the greater risk to the U.S. lies with them than with broker-dealers,' S&P noted."

"Fannie and Freddie have become almost the sole issuers of agency mortgage-backed securities, with these agencies holding an 82% market share in new issuance, nearly double their share of 46% in the second quarter of 2007, before the start of the crisis."

"S&P said it raised these points as a measure of caution. 'These potential risks are not a prediction, but a risk worth monitoring,' it said."

From Bloomberg. "The credit-default swap market has become a lesson in being careful what you wish for now that Wall Street has taken $245 billion of losses partly tied to such exotica. Rather than dispersing risk and lowering borrowing costs as former Federal Reserve Chairman Alan Greenspan predicted, the contracts have exacerbated the debt crisis."

"The latest version for AAA rated subprime mortgage bonds slumped by 43 percent since it began trading in August, according to Markit, as rising U.S. home loan delinquencies triggered a surge in the cost of credit-default swaps. That implies a 53 percent loss on the underlying mortgages, according to Wachovia Corp. analyst Glenn Schultz, almost four times the 13.75 percent rate predicted by Wachovia."

"U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier. About $460 billion of adjustable-rate loans are scheduled to reset this year, according to New York-based analysts at Citigroup Inc."

"Auction notices rose 32 percent from a year ago, a sign that more defaulting homeowners are 'simply walking away and deeding their properties back to the foreclosing lender'' rather than letting the home be auctioned, RealtyTrac CEO James Saccacio said."

"Bank seizures climbed 129 percent from a year earlier, according to RealtyTrac. March was the 27th consecutive month of year-on-year monthly foreclosure increases. In February, foreclosure filings rose 60 percent."

"Some borrowers are 'hanging on at the margins' in the face of resets, said Mark Goldman, a loan officer in San Diego. Goldman said one of his clients is a self-employed contractor whose adjustable-rate mortgage rose by two percentage points two months ago. His mortgage payment has increased to $7,200 from $4,900."

"'I've had people sitting in my office in tears because there are no loans available,' said Goldman. 'There are no loans for someone who's upside down on their house.'"

The News & Observer. "To see what the national housing meltdown looks like, take a drive to Sandlin Branch. Since December 2005, 45 of the 112 townhomes have been auctioned off in foreclosure sales. At least seven others are being dumped at drastic price reductions as owners scramble to salvage their credit ratings."

"Banks that repurchased the mortgage loans now hold assets worth a fraction of their original value."

"The Atlanta developer who sold the townhouses is under federal investigation for mortgage fraud. Investigators would not elaborate, but records show he established inflated prices by selling 12 of the first 17 townhomes to relatives."

"Dennis Coyle, who earns $19,000 a year as a maintenance worker, He bought the unit he was living in. 'The way they gave a deal, how could you turn it down with no down payment and you'd own a house?' Coyle said."

"His brother, James Coyle, wanted the same deal. James Coyle bought the Kentucky Drive unit he'd been renting, even though his income was low. 'I shouldn't have done it, but I had a chance to buy a house, which I had never done before,' he said. 'I was shocked I was approved.'"

"Wilma McCarter, an assembly line worker, bought the apartment she had lived in for eight years and three adjoining units. The apartment manager 'said they were selling," McCarter recalled recently. 'I said, 'I'd like to get four.' The next thing I knew, I was approved.'"

"Lenders and appraisers familiar with Sandlin Branch now agree that the units were overvalued, and the market bears them out: Townhomes originally priced at $105,500 are now selling regularly in the $40,000s. In June, one sold in a foreclosure auction for $37,000."

The Review Journal. "When Brad Cohen's monthly mortgage payment jumped from $1,700 to $2,400 and the bank came calling with foreclosure notices, Cohen did what any red-blooded, meat-and-potatoes American would do. He called a lawyer."

"The pending lawsuit could become the first local test case in a broadening national spate of claims against Realtors and lenders who lawyers say put buyers in houses too pricey for their budgets."

"Trial attorney Robert Cottle expects to file Cohen's lawsuit within the next 60 days. Cottle is preparing several lawsuits against Realtors, lenders and appraisers -- 'a triangle of professionals, every one of whom failed consumers most of the time,' Cottle said."

"Cottle estimated as many as 15,000 Las Vegans could have solid claims against sales agents, loan brokers and appraisers. Cottle agreed that home owners share some responsibility for taking out suitable loans."

"'But if you put food in front of a hungry man, he's going to eat it,' he said. 'The consumer relies upon the professional to do their job to protect his interests. This is professional greed. Greed won, the consumer lost, and now we're in this mess.'"

"Cohen has owned his 1,968-square-foot home in southeast Las Vegas since 1999. In 2005, the disabled dairyman refinanced his mortgage to pay off credit cards and 'put some cash in (his) pocket.'"

"Everything was fine, Cohen said, until September, when his interest rate adjusted and his monthly installment swelled to $2,400 a month. He hasn't been able to come up with a payment since. He owes more than the home is worth."

"His homeowners insurance has lapsed, and he can't swing his property taxes anymore. He's gotten as many as 14 calls in one day from his lender, along with letters denying requests to modify his loan's terms."

"'It's like everything is crumbling and I feel very trapped,' Cohen said. 'I'm down in a hole and I can't get out.'"

"He's alleging that the mortgage broker who refinanced his loan falsified his income on the loan application, and he's also saying she told him he didn't have to read the 200-page stack of papers she placed before him during the loan's closing. Because they'd done business before, he trusted her and didn't study the documents."

"'She said, 'We'll be here eight hours if you read every page,' Cohen recalled. 'Now that I look back, I just feel I was blindly taken advantage of because of trust. All your life, you work for certain things. You get them, and then they're taken away because of somebody else's dishonesty.'"

The Gazette. "El Paso County Assessor Mark Lowderman filed a formal complaint this morning with the state Division of Real Estate regarding the November 2006 purchase of five houses on Balsam Street."

"In his complaint, Lowderman asked the state to investigate allegations and admissions made by Colorado Springs landscaper Andrew C. Aranda, who told The Gazette he bought all five houses using $1.9 million obtained from five different lenders."

"Aranda said he was approached by real estate broker Robert B. Teegardin, a business associate, to buy the houses. Aranda admitted he signed documents that suggested he planned to live in each of the houses although he never intended to move. The deception allowed him to obtain 100 percent mortgages at lower interest rates than if he had described the purchases as investments for resale or rental."

"'How the heck was I going to live in five houses all at once?' Aranda said, suggesting he didn't know exactly what he was signing at closing."

"And he said he signed loan applications representing himself as single although he is married with four children. All five houses ended up in foreclosure and four have resold, each for about $100,000 less than the price Aranda paid."

"Aranda, 27, says he's the biggest victim in the Balsam Street case. He admitted signing the loans - which describe the married father of four as single and indicate his plans to live in each, although he said he never intended to move."

"And he admitted that he expected to get money back to help pay for the mortgages until the houses were resold. He also expected to get rewarded with business for his landscaping company."

"But Aranda claims he didn't understand the details and ramifications, including possible criminal charges."

"A Pueblo man was sentenced to 10 years in prison in February for a similar deal - he used straw buyers and inflated appraisals to obtain about $2 million in loans. He was convicted of racketeering under a Colorado organized crime law."

"'I didn't know what was going on,' Aranda said. 'I don't think there's any way in the world I can get in trouble for anything. I gained absolutely nothing. They ruined my credit. I have five foreclosures on my record. What did I get out of it?'"

"'It was just a bad investment deal,' Aranda said. 'I thought the deal would never go through. It's impossible to buy five houses like that. If I got approved for five houses, it wasn't legitimate.'"

"The overappraisal was key to the deal, Aranda said, because it generated $500,000 to be split between the scheme's five participants. 'There was a kickback that was supposed to pay the mortgages for so many months,' Aranda said. 'It was a chunk of change.'"

"'They left me holding the bag,' Aranda said. 'They screwed me pretty bad and put my family in jeopardy. I got the houses and suddenly nobody was talking to me about landscaping deals anymore.'"

"Aranda tried to sell the houses, which had sat empty for months after their completion in 2006 as the housing market cooled. 'I was paying $15,000 a month in house payments,' he said. 'I did landscaping to spruce them up. But they wouldn't sell. I was desperately trying to sell those houses. I was freaking out. I didn't know what to do.'"

"Besides the monthly mortgages, Aranda said he paid $600 a month on utilities and spent an additional $18,000 or more on landscaping on the houses. 'I ran out of money,' he said."

The Star Tribune. "Loan rescues, known in the industry as workouts, are raising a sweat among lenders and borrowers alike. Despite new government and lender initiatives that promise help is on the way, borrowers and brokers complain of long waits to connect with loan representatives, unreturned calls and conflicting information."

"'Once you get behind, you're always behind. You're never ahead,' said Scott McCune, a St. Louis Park resident who believes a loan modification last spring gave his family 'false hope.'"

"'I had high hopes, in the beginning, that we'd be able to help more people than we've actually been able to help," said Kris Wilson, loan officer in Bloomington. Summit tries to write new home loans for people who can't pay off their current mortgages."

"Some of these lenders refuse to go along with refinancing plans that will repay some, but not all, of their outstanding home equity loans, she said."

"'These people already lost their money,' Wilson said. 'Their collateral has evaporated. It isn't there. What we're asking [the lenders] to do, in many cases, is simply recognize that.'"

"The McCunes' May modification on their St. Louis Park home dropped the payment from $2,500 at a 13.5 percent interest rate to a $2,058 monthly payment at 8.2 percent. But it still wasn't enough."

"In the past two years, the couple's income was cut in half -- first when Scott, 54, went to culinary arts school and switched careers, then when Joyce, 49, lost her hospital administration job of 24 years. They tapped retirement savings and used the $200 their Marine sergeant son sends them each month to try to keep up with the loan modification."

"But in October 2007 a couple of checks bounced and the loan modification failed. The couple is waiting to hear if a second loan modification will be approved. Even if another modification is approved, Scott doubts they'll stay in the home. They can't afford to unless the lender reduces the principal owed. If they rent, the couple could begin to rebuild their savings."

"'Do you stay where the memories are or get on with life?' he said. Financially the answer, while painful, is crystal clear to Scott: 'Your home is no longer an investment. It's just a home. It's a place to be.'"

The Times Call. "Longmont psychologist Louis Krupnick helps his clients deal with a variety of problems, but lately many are talking about their money, or lack of it."

"Erie psychologist Stephanie Smith said the same thing. 'People are feeling pretty out of control with their financial lives,' said Smith, who works with Front Range Psychological Associates. 'It takes an enormous toll on couples and families.'"

"And today, on Tax Day, many feel worried about money they owe the government, according to the American Psychological Association."

"'We all know that we should not spend more than we are bringing in,' Smith said. 'But most of us are doing it anyway. And that’s hard to admit.'"

"The Boulder County Housing Authority Housing Counseling Program offers one-on-one foreclosure prevention and homeownership counseling to residents in Boulder and Broomfield counties."

"'There is a lot of stigma that surrounds foreclosure,' said coordinator Christopher Hudak. 'It’s helpful for people to get beyond that and look at it in purely financial terms for their own mental health.'"

"'As Americans, we confuse our needs and our wants,' Hudak said. And if you cannot stay in the house, then walk away in a manner that allows you to do so with dignity. Face the problem and sell the home before foreclosure, Hudak said."

"It’s important that people separate the house from how they feel about the house, so they can let it go, he said. 'There are memories, emotions,' he said. 'What you have to remember is, it’s a place to live.'"

"Then, he said, focus on the future and not just the problem. How can the move have a minimal impact on your family so you can start anew somewhere down the road?"

"And once you’ve made a change in your life, whether it’s reducing spending or selling your home, find more pleasure in simple things, said Krupnick, the psychologist in Longmont."

"Get together with friends and play Scrabble. Listen to music. Go for walks. 'Simple pleasures don’t cost a lot, and in the end, it’s what’s enduring,' Krupnick said."