Some housing bubble news from Wall Street and Washington. MarketWatch, "Housing starts plunged in March to the lowest level in 17 years. Home starts by U.S. home builders plunged 11.9% to a seasonally adjusted annual rate of 947,000 in March, the Commerce Department reported Wednesday. Starts were down 36.5% compared with March 2007. Read full government report. Also, building permits dropped 5.8% to 927,000 in March, 40.9% below the same month a year ago."

"'This report, while painful, implies healing in the sector,' because at least builders aren't digging a deeper hole, wrote economist Robert Brusca."

"Last month's single-family starts dropped 5.7% to a seasonally adjusted annual rate of 680,000 homes."

The Commerce Department, March 26, 2008. "Sales of new one-family houses in February 2008 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.8 percent (±15.0%)* below the revised January rate of 601,000 and is 29.8 percent (±9.6%) below the February 2007 estimate of 840,000."

"The seasonally adjusted estimate of new houses for sale at the end of February was 471,000. This represents a supply of 9.8 months at the current sales rate."

From CNBC.com. "RealtyTrac said there were 234,685 foreclosure findings in March, up 5 percent from February and 57 percent from March 2007."

"The report, found, though, that the rate of increase for auction notices far trailed those for default notices and bank repossessions, showing the escalation of a recent trend for homeowners."

"'On a year-over-year basis, default notices were up nearly 57 percent and bank repossessions were up nearly 129 percent, but auction notices were up only 32 percent, indicating that more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender,' James J. Saccacio, RealtyTrac CEO, said."

"With no equity in their homes and no particular desire to meet their financial commitments, folks are just leaving the keys in the mailbox."

"I stood in front of a foreclosed home on a sunny corner in West Palm Beach, Florida today. The abandoned house was empty and worn, its overgrown lawn covered in trash, a sorry sight in an otherwise well-kept neighborhood."

"I don't know the particular story of that particular house, but I do know that plenty of folks are leaving homes like it behind, and leaving a financial mess along with it."

From Reuters. "JPMorgan Chase, fresh from scooping up a rival investment bank, Bear Stearns, saw earnings drop 50 percent in the first quarter as it was hurt badly by market turmoil and heavy credit losses."

"The bank also set aside $5.1 billion to strengthen its reserves by $2.5 billion and to account for $2.6 billion in losses in its loan portfolio."

"Mortgage and credit card losses have ballooned, especially in areas like Arizona and Florida where housing values have plummeted and foreclosures have risen. Bank executives set aside more than $1.1 billion to cover future home equity loan losses. But they are expected to continue to rise."

From Bloomberg. "JPMorgan Chase & Co. CEO Jamie Dimon said he expects U.S. home prices to drop as much as 9 percent this year as even borrowers with the best credit are having difficulty keeping up their mortgage payments."

"'Real estate is getting worse,' Dimon said in a conference call today with investors. 'Home prices we still expect to go down.'"

The Associated Press. "Washington Mutual, the nation's largest savings and loan, said Tuesday it lost more than $1.1 billion in the first quarter as the struggling economy and flagging real estate values pummeled the bank's borrowers."

"Washington Mutual said it needed to set aside $3.5 billion to cover bad loans in its $250 billion portfolio during the first quarter. The bank set aside less than half as much to cover bad loans in the year-ago period."

The Street.com. "Washington Mutual director Mary Pugh has resigned, the company said Tuesday at an annual shareholder meeting marked by investor anger over the company's alleged missteps in the housing and credit crises."

"CtW Investment Group, an activist pension fund investor, and other activist investors had called on shareholders to withhold votes for Pugh, chairwoman of the bank's finance committee and a director since 1999, and fellow Director James Stever."

"CtW alleges that as heads of WaMu's committees responsible for risk management oversight and compensation plan design, the two directors 'bear responsibility for Washington Mutual's failure to recognize and act in a timely manner on the risks to shareholder value presented by the housing bubble,' it said in a March letter to other WaMu shareholders that was also released to the public."

"In addition, CtW alleged that the two directors played a part in 'attempting to insulate executive bonuses from the consequences of this risk management failure.'"

"Standard & Poor's on Tuesday said it may cut $57.1 billion of subprime-related debt due to continuing delinquencies and a worsening outlook, the rating company said."

"'Today's rating actions incorporate our most recent economic assumptions and reflect our expectation of further defaults and losses on the underlying mortgage loans,' S&P said in a statement."

"S&P said it is reviewing loss expectation for more than 17 percent of U.S. subprime debt deals issued in the first half of 2007, due to the latest delinquency trends, loan risks and deterioration in the rating firm's macroeconomic outlook."

"The Securities and Exchange Commission will soon propose more rules to police credit rating agencies, SEC Chairman Christopher Cox said on Wednesday."

"Credit raters have been criticized by investors, regulators and lawmakers in recent months for contributing to the U.S. subprime mortgage meltdown by issuing inaccurate ratings on products backed by subprime mortgages, and for lowering ratings too slowly after the products performed poorly."

"'We will shortly propose additional rules building on the lessons learned from the subprime market turmoil,' Cox said. New rules would affect rating companies such as Moody's Corp and McGraw-Hill Cos Inc's Standard & Poor's."

The Buffalo News. "M&T Bank Corp. CEO Robert G. Wilmers, citing 'the extraordinary time in which we find ourselves,' called Tuesday for the re-establishment, in modern form, of a Depression-era government agency to rescue 3 million mortgage borrowers who are behind on their loans."

"Speaking to more than 200 executives, employees and shareholders at M&T’s annual meeting, the widely respected chairman of the Buffalo-based bank said the nation is facing a 'crisis of confidence in the financial services industry.'"

"Critics say the government should not help people who stretched to buy more than they could afford, speculated on property as investors, or lied on their loan applications."

"'The toughest problem — one that didn’t seem to be an issue in the 30s — was the extent that people got into mortgages they shouldn’t have gotten into and don’t deserve help,' said Bert Ely, a regulatory consultant in Alexandria, Va. 'There’s real concern that the people that would be helped out in this program were the ones that were least responsible financially.'"

"Wilmers noted that where commercial and savings banks held 71 percent of all private loans in 1978, that has now fallen to just one-third of more than $18.7 trillion in credit. That’s a result of the slicing, dicing and repackaging of loans by Wall Street and the involvement of new players like mortgage brokers and hedge funds."

"'Over an extended period of time, a great many extremely smart and sophisticated people conspired — without intending to do so — to put our overall financial system at serious risk,' Wilmers said. 'All the elements were put in place to turn our financial markets into a virtual casino.'"

The Columbus Dispatch. "The foreclosures keep coming, which means more vacancies, which mean more thefts. March was the worst month in memory for Franklin County, with 906 foreclosures. January had 904."

"The average foreclosed home stays vacant for five months nationwide, said Tom Popik, who designed a national survey for Campbell Communications in Washington, D.C. During that five months, half of those homes sustain some kind of damage."

"Some, he said, is at the hands of angry owners who damage their homes when they lose them to foreclosure."

"For now, real-estate agents and investors are stuck. Some board up the houses, which angers the neighbors. Most try to make friends with the neighbors, hoping they will keep watch on the property."

"Some have even tried paying the neighbors to watch, said Dave Zehala, executive director of the Columbus Real Estate Investors Association. But the thefts continue. 'It's a significant problem,' he said."

The Union Tribune. "In Encanto, where the median price of a resale home slid nearly 38 percent last quarter compared with a year earlier, foreclosure sales have been on the rise, said real estate agent Steve Lemack. Making matters worse, many disgruntled owners who have lost their homes have stripped them clean, depressing prices further, he said."

"'We had one house where the bank offered the tenants $2,500 relocation assistance, but the day we were supposed to go to give the check, no one was there, and the owners had stripped the kitchen of the counters, the sink and all the appliances, the water heater and the toilets. They even dug up the trees in the backyard,' Lemack said."

"'I could've sold it for $250,000, but we sold it for $200,000. So when other agents get comps, they use lowball comparisons to push properties down further,' he said."