Some housing bubble news from Wall Street and Washington. MarketWatch, "In a sign that the U.S. housing market may have further to weaken, an index of sales contracts on previously owned homes fell 1.0% in March from the prior month, the National Association of Realtors reported Wednesday. The NAR's index, considered a leading indicator of existing home sales, was 20.1% below the March 2007 level."

"Some observers were cheered by last month's report that signaled a bottom could be approaching. However, the February index was revised to a decline of 2.8% from the prior estimate of a 1.9% drop."

"'Although some market adjustments are necessary, a downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs,' said Lawrence Yun, NAR chief economist. 'It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.'"

From Bloomberg. "Florida home builder WCI Communities reported its sixth consecutive loss. The first quarter net loss widened to $84.1 million,, the Bonita Springs-based company said Wednesday in a statement. Revenue declined 59 percent to $137.1 million."

"WCI said net new orders fell 23 percent to 183 and completed home sales declined 45 percent to 309."

"'Beyond the seasonal lift in Florida, there are no signs that demand has firmed -- many potential purchasers continue to sit on the sidelines afraid of falling prices and the direction of the economy,' CEO Jerry Starkey said in the statement."

"'We...saw a dramatic drop in traffic and new orders in the Northeast and Mid-Atlantic,' said Starkey. Most of WCI's business is concentrated in Florida, but it also builds in the New York and Washington, D.C., metropolitan areas."

The St Petersburg Times. "St. Joe Co., the state's top private landowner with 638,000 acres spread mostly across the Florida Panhandle, suggests the real estate market in its neck of the woods might have bottomed. The company's task now is to 'retrain' buyers that home purchases can't be deferred forever, CEO Peter Rummell said Tuesday."

"'We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,' Rummell said. 'So now people are going to have to learn that they've gotten to that point.'"

"St. Joe's residential housing business, mainly Gulf Coast resort property, has been in free fall. Its closest project to the Tampa Bay area is the SevenShore condominium project in Bradenton. The residential side of the business brought in $30-million in early 2007 but only $9.8-million in early 2008. The company said 'opportunistic value buyers' have replaced traditional home purchasers."

"In the first quarter of this year, the company made $91-million on the sale of 57,435 acres to sportsmen, investors, conservationists and other buyers attracted to prices of $1,330 to $4,500 per acre."

"In a conference call Tuesday, Rummell said home and lot prices are 'starting to firm' after deteriorating 20 to 30 percent from their peaks in August 2005. 'If we are in fact on the floor of the valley, the question is, 'How wide is the valley?' Rummell asked.

The Associated Press. "State-owned Bayerische Landesbank said Wednesday its ¤1.1 billion (US$1.7 billion) in write-down related to risky subprime investments pushed the company to a first-quarter pretax loss of ¤770 million."

The Post Gazette. "While it does not appear any local banks have frozen home equity lines of credit in Western Pennsylvania, at least one -- National City Bank -- has indicated that it might exercise that option."

"'In situations where there has been a material change in financial circumstances or a significant decline in the mortgaged property's value, we may suspend further access to a homeowner's line of credit,' said Bill Eiler, a company spokesman."

"'We are facing an unprecedented time in the housing industry, and we believe it's prudent to assess and address risks that arise due to significant changes that have occurred since the original line of credit was extended,' he said."

"Mr. Eiler did not want to identify any markets that might be affected; the bank covers nine states. Countrywide and other major banks have been notifying customers across the country that they no longer can write checks on their credit lines because sinking home prices have left them with little or no equity."

"Carrie Coghill-Kuntz, president of DB Root & Co., a Downtown investment manager, said she believes banks are making a smart move in scaling back on credit where equity has been lost."

"'It goes back to the whole reason we're in this mess,' she said. 'People are borrowing too much.'"

The Sun Sentinel. "In the U.S. Bankruptcy Court's Southern District of Florida, there were 73 percent more business and personal bankruptcies in April compared with a year ago, according to new statistics. Business bankruptcy filings nationwide increased 49 percent in April from a year earlier, the biggest gain so far in 2008."

"The rise in bankruptcies began a couple of years ago with the housing downturn and now related businesses, including contractors, door and window companies and flooring businesses, are declaring bankruptcy."

"'This is really serious. It's not going to be a short cycle. It's not a quick recovery,' said Paul Singerman, bankruptcy lawyer for Levitt and Sons of Fort Lauderdale."

"For every client that files bankruptcy, Singerman said he has 10 more troubled clients that do 'workouts,' to avoid bankruptcy. They sell the business, refinance debt, or take on new partners with money."

"In South Florida, many family-owned businesses are being affected. 'We're seeing generations of wealth evaporate,' Singerman said."

The Charleston Daily Mail. "A Welch-based bank that looked for growth by opening an office in Florida five years ago now finds itself working out of a mortgage mess. Ameribank Inc., after grappling for decades with a shrinking coalfield economy, opened a branch in wealthy, growing Palm Beach County, Fla., in 2003."

"Jim Sutton, the bank's vice chairman at the time, explained the theory behind the Florida expansion: 'The growth of Palm Beach County will allow us to prosper.'"

"But the expansion turned sour last year. Bauer Financial Inc., an independent bank rating firm that rates banks on a scale from 0 to 5 stars, gives Ameribank 0 stars - its lowest rating."

"Palm Beach Post Staff Writer Randy Diamond told the story in a March 7 article headlined, 'Rural W.Va. Bank Lost Big on Loans Here.' The article recounts how, after opening the Florida office, Ameribank struck a deal with Lending One, a Florida-based mortgage broker. Borrowers paid Lending One 15 percent interest, Diamond reported. Ameribank assumed the risk for loans in 11 states and in return received 8 percent of the interest."

"Lending One 'was selling thousands of no-money-down one-year home mortgage and renovation loans designed for speculators who wanted to buy fixer-uppers and flip them for sale at a higher price,' Diamond reported. 'But the borrowers didn't have to repay any of the money until after the houses they bought had been renovated and sold.'"

"Ameribank President David Hartman said Tuesday, 'The whole concept that the price of real estate is going to constantly go up is a stupid idea. If that stops and you're talking about people buying homes as investment properties only and the price of homes goes down, that can be a problem.'"

The Palm Beach Post. "In a wide-ranging mortgage scam, two real estate investors and a mortgage broker used inflated appraisals, straw borrowers and phony loan applications to fleece big-name lenders of millions, federal prosecutors say."

"The collateral for the ambitious fraud? McMansions throughout Palm Beach County, including several in posh gated communities in Wellington and Boca Raton."

"An assistant U.S. attorney calls the alleged scammers 'economic parasites' whose ilk have played a little-noticed role in the mortgage meltdown that has roiled financial markets worldwide. Such scams have been especially common in South Florida, where state and federal investigators believe a boom-and-bust housing market has made some willing to bend the rules for illicit profits."

"The U.S. Attorney's Office accuses Berry Louidort and Ralph Michel (also known as Ralph Duverneau) of putting together deals for two dozen homes in Palm Beach County, persuading banks to loan far more than the properties actually sold for, then pocketing the difference and letting many of the homes lapse into foreclosure."

"Boca Raton mortgage broker Lauren Jasky helped Louidort and Michel arrange the deals, prosecutors say."

"Louidort, 26, Michel, 35, and Jasky, 29, were arrested April 23, and it's hard to say which detail of their deals, as federal officials describe in court documents, is the most jaw-dropping."

"There's Michel - a native of Haiti who, according to his attorney, can't read or write well enough to pass a U.S. citizenship test - collecting 'assignment fees' of $650,000 and $600,000 on side-by-side homes in the Versailles development in Wellington."

"There's Louidort, also a native of Haiti, describing a scheme to buy 50 condos in Boynton Beach while stealing $4 million from lenders. He thinks he's talking to a willing accomplice. In fact, he's laying out the plot to an undercover FBI agent who captures the conversation on videotape."

"There are straw buyers, such as the part-time Publix cashier whose income on loan applications was inflated from $13,000 to $344,000 so she could qualify for $1.3 million in loans on a palatial home in a gated community in Boca Raton. The borrowers haven't been charged."

"In another instance, a borrower making $25,000 a year as a hotel worker claimed to make $594,120 a year at Florida All Insurance. That borrower landed $1.8 million in loans for a home in Wellington."

"There's Jasky saying she doesn't want to know the unsavory details of the loans she's shopping to lenders. Meanwhile, her mother is acting as the Realtor on some of the deals."

"In court documents, FBI Special Agent Elizabeth Lynch, who posed as a developer who wanted in on the deals,...describes an April 14 meeting with Jasky, Louidort and an unidentified appraiser. Louidort outlined his plan to buy 50 Boynton condos valued at $115,000 and fool lenders into believing they were worth $205,000."

"'During this discussion about the kickback, Jasky stated words to the effect she didn't hear, didn't see and didn't care and continues to talk about closing 10 and 50 loans, as soon as possible,' Lynch wrote in an April 22 affidavit."

"And there are some of the world's most sophisticated financial institutions, including JPMorgan Chase and Bank of New York, making loans on these properties for twice what they were worth. The Wall Street giants approved these mortgages in 2007 for much more than the properties sold for in 2005 and 2006, despite the steep downturn in home prices in Palm Beach County."

"'This case is getting bigger by the minute,' Assistant U.S. Attorney Lothrop Morris said during an April 30 hearing in federal court in West Palm Beach. 'We have no idea how big the loss is going to be.'"

"Lauren Jasky is out of jail after putting up her home and two homes her parents own as collateral for her bond. Louidort and Michel remain in jail."

From 11 Alive.com. "Record-high numbers of home-foreclosure sales filled courthouse steps across Metro Atlanta on Tuesday."

"Mortgage holders, trying to get some of their money back, at auction, from homeowners who defaulted, sent their attorneys to the first-Tuesday-of-every-month mission with bigger inventories than ever to sell, in one of the toughest sellers' markets ever."

"Protestors, angry at the mortgage industry, showed up at the auction outside the Fulton County courthouse singing and chanting and marching. They were unable to stop, or even drown out, the efficient drone of the mortgage attorneys reading the legal descriptions of hundreds of properties and trying to sell them."

"The protestors are accusing mortgage lenders with 'reverse red-lining,' making quick profits off of the poor by writing them home loans that they can't possible pay back to whomever ends up holding the mortgages."

"'I'm not against free enterprise,' said the Rev. Dr. Richard Cobble, 'because this is America…. There ought to be a system in place where everybody can sit at the table, where it would be a win-win situation for everybody' so the borrowers can keep their homes and the mortgage holders can, eventually, be paid in full."

"Investor Lamar Lang is at the auction, stuck with an inventory of more than a dozen $500,000 homes in default that he can't sell. 'I'll tell you what, if you don't steal a house now, you'd better not buy. 'Cause you can't sell it.'"

"Chenieve Williams, who has never owned a home, came to the Fulton County courthouse steps to try to buy one. She and her husband researched the foreclosure notices and found a midtown Atlanta condo that was scheduled for auction."

"'The market value, I'd say, is probably going to be around $170,000. And the opening bid is $33,000,' cash."

"The American Dream has not 'gone bust' for Williams. It's just recycled. 'It's really just, it's a way to build wealth, personal wealth. So my husband and I decided now is the best time to jump in.'"