Some housing bubble news from Wall Street and Washington. CNN Money, "With prices crashing around the nation, home price affordability has improved dramatically in many U.S. cities...during the first three months of 2007 with home prices the most affordable they've been since the three month period that ended June 30, 2004...according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders."

"'This measure can only take you so far in implications for the market," said Dave Seiders, NAHB's chief economist. 'There're several factors that the index does not capture.'"

"These include buyer expectations. Many are reluctant to act in falling markets. That sentiment can contribute to market overshoot, according to Seiders, in which prices fall lower than would be their logical bottom."

From Reuters. "Impac Mortgage Holdings Inc, a struggling lender, said its survival could be threatened following a $2.05 billion loss in 2007, and that the U.S. Securities and Exchange Commission was inquiring into its operations."

"Impac said its liabilities exceeded its assets at year-end, giving it negative shareholder equity of $1.08 billion."

The Banking Times. "UBS, the Swiss investment bank that has so far recorded larger losses from the credit crisis than any other financial institution, has sold some of its mortgage-backed securities to BlackRock, the fund manager."

"The disposal has been made for $15 billion representing a $7 billion loss on the nominal value of the loans. The bank had written down around $37 billion prior to the sale and analysts estimate that its exposure to US sup-prime mortgage debt now stands at around $17 billion."

"UBS said the vast majority of the positions sold were subprime assets -- the lowest quality of real estate loans, and so-called Alt-A assets -- ranked one step above subprime, in roughly equal parts. The remainder was ranked prime."

"The face value of the portfolio was $22 billion, meaning UBS received about 68 cents to the dollar on the sale."

"National City Corp said on Wednesday that it may sell 'problem' assets or put some of them in separate entities, after large mortgage losses drove Ohio's largest bank to raise $7 billion of capital."

"Speaking at a Lehman Brothers Inc conference in London, Chief Executive Peter Raskind said National City is evaluating its alternatives 'along with our many friends on Wall Street.'"

The Associated Press. "Credit ratings agency Fitch Ratings said Tuesday night it downgraded four of Standard Pacific Corp.'s ratings due to continued weakness in two of the homebuilder's core markets. All four ratings are considered junk status."

"Fitch cut the ratings because of continued weakness in the housing markets, especially in Standard Pacific's key California and Florida markets."

"Shares of Moody's Corp fell after the rating agency said a computer snafu resulted in incorrect top ratings for complex debt."

"'Moody's is simply telling the truth slowly, and there's more truth to be told,' said Janet Tavakoli, a consultant and president of Tavakoli Structured Finance in Chicago. 'Up until now I thought the rating agencies were incompetent rookies in structured products. Now I'm suspicious that they may be crooked.'"

Business Intelligence. "Credit rating agencies, criticised for failing to warn investors about the risks of US subprime mortgage-related products, should support a proposed global industry oversight body or face more regulation, European Union market watchdogs said this week."

"The new body should 'name and shame' agencies that fall short. Agencies like Moody's Corp, McGraw-Hill Cos. Inc.'s Standard & Poor's and Fimalac's Fitch Ratings have been under pressure by investors, regulators and critics for the past year for incorrectly rating subprime mortgage debt."

The Baltimore Sun. "A 2 1/2 year housing slump paired with increasingly restrictive borrowing rules and a shift to lenders handling more of their own loans? Very bad. 'Each week it's harder,' said Charles J. DiPino, co-owner of Universal Trust Mortgage in Columbia, which is fighting to keep business level. 'Mortgage brokers are facing an extreme uphill battle.'"

"Brokers, for their part, contend that they were simply following the relaxed rules set by mortgage companies. 'Lenders threw away their underwriting guidelines,' said Roy DeLoach, executive VP of the National Association of Mortgage Brokers."

"Said Guy Cecala, publisher of Inside Mortgage Finance, who doesn't think consumers would be well served if the broker industry disappeared: 'There's plenty of blame to go around.'"

From WAPT.com. "Experts say that every home that goes into foreclosure forces down the values of nearby homes by 1 percent. Madison officials said the city has long been a target of mortgage fraud."

"Madison Mayor Mary Hawkins-Butler said mortgage fraud in the city first caught her attention seven years ago. Homeowners noticed houses would sell, but would never be occupied."

"'Madison has been targeted and it's my duty as mayor to do something about it,' Hawkins-Butler said. 'Madison is not in denial about it. We are not saying it doesn't exist. It exists all over the country.'"

"In 2006, FBI research estimated that mortgage fraud would reach $4.2 billion nationwide. Madison officials do not know how many houses were purchased through mortgage fraud schemes. 'If you have ever seen the movie 'Forrest Gump,' you know there are a lot of different ways to cook shrimp. There are just about as many ways to commit mortgage fraud,' said Madison County assistant district attorney Dow Yodder."

The Wall Street Journal. "Efforts to stem the record tide of U.S. foreclosures are a 'train wreck,' hampered by a lack of resources and the continued deterioration of the real-estate market, a federal banking regulator said."

"'There are more loan lines and I think servicers are doing more but it's just not keeping pace,' Federal Deposit Insurance Corp. Chairman Sheila Bair told reporters."

"Bair, who has been a leading voice at the federal level in addressing the housing crisis, said a recent report that suggested two-thirds of seriously delinquent borrowers aren't in a workout plan was 'pretty depressing.'"

"'They're overwhelmed, and the counselors are overwhelmed .. it's a train wreck,' Bair said."

The Grand Rapids Press. "Fifth Third Bancorp.'s CEO said Tuesday the banking environment is the toughest he has seen in his nearly three-decade career. Kevin Kabat, CEO since April 2007, said the Cincinnati-based bank has been hit by sagging economies in major markets such as Michigan and Florida and the downturn in real estate markets."

"'I've been in banking for 28 years ... and in all that time I've never seen a more challenging operating environment than what we're seeing today,' Kabat told donors during a speech for Junior Achievement of the Michigan Great Lakes."

"In less than a year, more than $10 billion in shareholder value has been wiped out at Fifth Third. The declining stock price has come along with price drops at other banks across the country."

"Kabat said the lack of merger activity is a reflection of banks waiting out the capital crunch and trying to make sure their due diligence is complete so there are no surprises once a deal is announced."

"'We're probably going to see more bank failures in this next 12- to 24-month period than we've seen in the past 15 years,' he said."

The New York Post. "It turns out that not even the father of the mortgage-backed securities market is immune to the mother of all mortgage busts. Lewis Ranieri's Franklin Bank Corp., a Houston-based savings and loan of which he is chairman, is getting hammered by bad bets on home mortgages and commercial loans."

"Making matters worse, yesterday Franklin CEO Anthony Nocella was ousted after an internal audit uncovered accounting errors, the bank said. The Securities and Exchange Commission also is investigating the thrift."

"Ranieri is widely seen as the man who helped package mortgages into bonds that now make up the multi-trillion dollar mortgage-backed securities market that is at the center of today's credit crunch."

"Franklin's share price, which had a 52-week high of $17 in May 2007, closed yesterday at 98 cents a share on the news."

"For Ranieri, an inductee into the 1997 National Housing Hall of Fame, righting the ship at Franklin, or finding a willing buyer, may be a tall order - and is something even Ranieri seemed to recognize more than a year ago."

"'This is the leading edge of the storm,' Ranieri said in an interview with Bloomberg News in February 2007. 'If you think this is bad, imagine what it's going to be like in the middle of the crisis.'"