Some housing bubble news from Wall Street and Washington. Bloomberg, "U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier.More than 243,300 properties were in some stage of foreclosure, the highest monthly total since RealtyTrac began in January 2005. Nevada, California and Florida had the highest rates. Filings rose 4 percent from March."

"'Loan modification isn't working,' said said Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington. 'It's extremely difficult for a homeowner to talk to a servicer and even if they do, it's hard to get the servicer to change the terms. You get voice-mail hell, they don't return calls, you can't get a live person on the phone.'"

"The median price for a single-family home fell 7.7 percent in the first quarter, the National Association of Realtors reported yesterday. There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report."

"'Inventory levels have soared to unprecedented levels' Brian Fabbri, chief North American economist for BNP Paribas, said in an interview. 'Builders and homeowners have to lower their prices significantly to sell that inventory out.'"

From Realty Check. "So what about all the reports that borrowers are being helped, and all those programs to find and refi borrowers, and what about the word from some other sources that foreclosure numbers are actually dipping?"

"Apparently the system, that is whatever court or clerk or local bureaucratic office is stuck with recording all this stuff, is stressed. In Ohio, for example, I’m being told that it can take two to six months to get your filings in the system."

"'In states like Michigan, we’re hearing from some of the trustees who actually do the foreclosures that the lenders have asked them to slow down because they don’t want to process any more into a market that won’t absorb the properties back through sales,' says Rick Sharga of RealtyTrac."

"In Florida, a St. Lucie County court actually added a night shift to handle the massive backlog of foreclosure filings. The clerk of the courts was quoted as saying the caseload has become, 'just horrendous.'"

"The court used to handle about forty filings per month. In January they were tracking 715 foreclosure filings. Some are reporting lower numbers because the numbers simply can’t get into the system."

The Arlington Advocate. "With the pace of foreclosures continuing to break records, lawmakers attempted Tuesday to stanch some of the bleeding, offering a trio of bills that drew throngs of supporters to Beacon Hill. All three were sponsored by Sen. Dianne Wilkerson, D-Boston."

"Rep. William Brownsberger, a Belmont Democrat, argued that major lenders and other large companies get federal assistance when on the verge of collapse. 'We bail out Chrysler, we bail out Bear Stearns,' he said. 'Now we’re talking about neighborhoods that are going down. It’s time to change the deal.'"

"Rep. Elizabeth Malia decried what she called 'this tsunami of economic insanity.' 'Allowing the termites to get fat, eventually the house is going to come down on our heads, literally,' she said. 'We’re rewarding [lenders] by not legislating them any further and by not protecting the homeowners and the tenants.'"

National Mortgage News. "As the fallout from the mortgage meltdown continues, pundits are scratching their heads as an increasing number of borrowers 'just walk away' from their homes."

"It should come as no surprise that families who purchased homes at the height of the market would walk away when declining market prices left them upside down on their loans. This is especially true for those whose purchases were funded using 100% financing with interest-only teaser-rate ARM loans that are now resetting."

"What is surprising is the alarming number of walk-aways who have loans a year or more away from a rate reset. Welcome to the hidden world of occupancy fraud, the 'x' factor in the meltdown."

"For many years, occupancy fraud was tolerated by lenders so long as the mortgage payments were made. Speculators and investors, who played a significant role in the inflation phase of the housing bubble, took advantage of this fact by misrepresenting their intended use of the property, especially in South Florida, Arizona, Nevada and California."

"It’s no wonder that these four states lead the nation in defaults and foreclosures, or that they sit atop the fraud indices, as these liars just walk away from their bad — and intentionally hidden — investments."

"Does it make sense that a borrower in a 3,000-square-foot, $700,000 home in California would buy a 1,700-square-foot, $150,000 second home in Between, Georgia? Does it make sense for a borrower to own multiple properties in the same area? Of course not, especially when the 'residence in question' is only three miles away from the primary residence and the borrower says he’s sometimes 'too tired to go home after working out in the gym' (true story!)."

The Australian. "Looking to charge into the red-hot US business of sub-prime debt two years ago, Mizuho Financial Group's brokerage poached 11 bankers, traders and salespeople, headed by structured finance ace Alexander Rekeda, from investment bank Calyon. Mizuho wanted to quickly build up its business of packaging mortgage loans into collateralised debt obligations."

"When Mizuho releases earnings today, it will project that its losses from mortgage-related investments will total at least $US5.1 billion. 'We wanted to take our business global,' a Mizuho Securities spokesman said, explaining why the bank chose to enter the CDO market."

"Mr Rekeda made frequent media appearances to promote his fledgling team. 'The 2007 vintage of residential mortgage-backed securities is looking to be one of the best vintages in 10 years,' Mr Rekeda said in one interview in April last year."

"As Mizuho's team stepped up its trading last year, signs of trouble were brewing in the market. Undaunted, Mr Rekeda and his team marched on."

"'There is very little trading in CDOs going on,' Mr Rekeda acknowledged in mid-July. Nevertheless, his group put together a large CDO that month, and even managed to increase its size to $US1.6 billion from an initial $US1.2 billion, citing strong investor demand."

From MarketWatch. "Freddie Mac...the mortgage-finance giant, posted a loss on expenses related to 'challenging' housing and credit-market conditions, as Freddie Mac's CEO predicted that continuing weakness in the U.S. housing market would hurt the company's bottom line for the year."

"The company said difficult housing- and credit-market conditions were behind a $1.2 billion provision for credit losses taken in the latest quarter."

The Baltimore Sun. "Home sales fell faster in Maryland than in any other state in the nation in the first three months of the year, dropping more than even in hard-hit spots of the country such as California, a Realtors group said yesterday."

"The median price of single-family homes fell 3 percent in the Baltimore metro area in those months, which was middle of the pack in the country. In the Washington metro area, which includes parts of Maryland, the price fell 13 percent, still a far cry from the drops on the West Coast. Sales prices fell more than 25 percent in both Sacramento and Riverside, Calif."

"Marc Witman, a partner with Yerman Witman Gaines & Conklin Realty in Baltimore, strongly suspects that Maryland home sales are falling so fast because prices aren't."

"'There's a disconnect between what the buyers expect to see and what the sellers expect to receive,' he said. 'It's like the buyers are the only ones reading the newspapers. I think when you see the median price come down 10 or so percent, then you're going to see more buyers come off the sidelines.'"

"Amna Kirmani, a marketing professor at the University of Maryland who specializes in consumer behavior, calls it the 'my house is different' phenomenon: 'People are anchoring on their own love for their houses instead of anchoring on what the market is doing right now. We never think it applies to us.'"

"Some sellers, particularly those who bought in the past few years, think they have no choice. If they lower their asking prices, they'll get less than they owe on their loans. 'It's a challenging time right now,' said Keith T. Gumbinger, a VP with financial publisher HSH Associates."

"Maryland rode the wave higher than most: Prices here rose 21 percent in 2005, according to the Office of Federal Housing Enterprise Oversight - a bigger increase than all but three states and the District of Columbia. California's increase was just slightly smaller."

"'Our prices went up most precipitously, and the prices aren't coming down' to the extent that they are in California and the D.C. area, said Witman, the real estate broker. 'Witman's theory' is the prices ran up so quickly that we need to give something back.'"

The Bucks County Courier Times. "Nervous homebuyers looked but didn't buy during the second quarter, cutting Toll Brothers' homebuilding revenue by 30 percent."

"'When we have held promotions, buyers have come out to play and put down deposits,' CEO Robert Toll said during a conference call Tuesday with investors. 'Often, however, a lack of confidence in the direction of home prices overcomes their enthusiasm and they don't take the next step of going to contract.'"

"Toll also said potential homebuyers are afraid they won't be able to sell their existing homes."

"Sales contracts after cancellations totaled 929 homes for $496.4 million, a decline of 44 percent in number of homes and 58 percent in dollars from the same period last year."

"'It's clearly a buyer's market, but buyers can only take advantage of it if they buy,' Toll said. 'Sooner or later they will, but unfortunately, we can't predict when.'"

"Toll said most U.S. home markets have weakened. But a surprising high point has been Naples, Fla., an area that's among the hardest hit by the housing downturn. He gave the area an A-minus, while all other markets in Florida were given an F. He said Philadelphia suburbs are a C-minus, but the Pocono Mountain region is an F-minus."

"'You can't give away stuff in the East right now,' he said. 'It's very surprising.'"

The Street.com. "Blaming the media for the fractured state of your business is lamer than the retail industry's fallback excuse of too hot/cold/rainy/dry weather. It is also an indication that your troubles are far from over."

"Enter Robert Toll, CEO of the estimable Toll Brothers, flapping his gums about how media reports about falling house prices are scaring customers away from buying."

"Said Toll, while announcing anemic preliminary quarterly results: 'We believe there is significant pent-up demand which is growing. When we have held promotions, buyers have come out to play and put down deposits. Often, however, a lack of confidence in the direction of home prices overcomes their enthusiasm and they don't take the next step of going to contract. They, like all of us, read the papers and watch TV, both of which keep advising them that home prices are declining.'"

"This has become quite a go-to line for the leader of an overextended company, one whose products customers can't afford based on carrying costs."

"Last quarter, while reporting the company's worst results in two decades, he said: 'Ceaseless talk of a recession continues to dampen the mood of consumers. This drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures has kept pent-up demand on the sidelines.'"

"Got that? It's not that a recession is (probably) at hand. Nah. It's the media talking up a recession, probably because they want the newspapers they work for to go Chapter 11 even quicker."

"Let's count the ways that Toll's sad little mantra is misleading: 1) I don't remember Toll crediting the media during the ridiculous housing run-up for chasing real estate advertising money with 1,423,789,678 happy profiles about people in houses that they had redecorated and were going to increase in value forever. Remember? The word 'subprime' was literally not in the journalistic vocabulary."

"2) Since the housing downturn began, a good portion of the media has been busily predicting its recovery. Watch The Wall Street Journal build an entire imminent recovery story on a single statistic: from a realtor trade no less."

"Or witness The New York Times not even mentioning the role of the strong dollar in temporarily propping up New York City housing prices. Or that widespread declaration of a recovery before the downturn had hardly begun when existing home sales blipped up for a grand total of two months in a row. Usually it takes three to declare a false trend, but they made an exception for real estate at two."

"The irony is that the media, so cowed by fear, eager to shift story lines and write real estate recovery stories and apt to report in an on-the-one-hand-on-the-other-hand fashion, which gives a free showcase to any ridiculous claim, does not call this for what it is: a hustle job."

"Look closely at Toll's quote at his company's most recent disaster of a quarter. He mentions people reacting to promotions, but not going all the way to closing. Anyone in any business will tell you this: If people are getting intrigued by discounts and promotions, but not yet making it all the way to the cash register, guess what it means?"

"The discounts and promotions are not steep enough and prices have to come down by another 20%. And that ain't the media's fault."

From CNBC.com. "The Federal Reserve may start using regulation or even interest rates to fight asset-price bubbles, instead of trying to limit the damage once they burst, as it has done until now, the Financial Times reported on its Web site."

"One option is for the Fed to set interest rates higher than they would otherwise be when asset prices appear to be rising beyond levels justified by economic fundamentals, the paper said."

"Fed Chairman Ben Bernanke, who rejected this approach in 2002 after the dot-com bubble burst and endorsed Alan Greenspan's view that the Fed should not 'lean against the wind,' is now willing to reevaluate it in the light of the housing and credit crises."