Some housing bubble news from Wall Street and Washington. Bloomberg, "Builders in the U.S. broke ground in May on the fewest houses in 17 years. Housing starts fell 3.3 percent to a 975,000 pace from a revised 1.008 million in April, the Commerce Department said today in Washington. The reading was the lowest since March 1991. The five largest homebuilders have reported a combined $3.4 billion in losses in their most recent quarters as new-home sales fell."

The Independent from the UK. "The number of new homes built in 2008 will be the lowest in any year since the end of the Second World War, the construction industry said yesterday."

"'The impact on the new-build housing market has been more severe than any of us anticipated,' said Michael Ankers, the Construction Products Association's chief executive."

"Mr Ankers also warned that without immediate support for the industry, production cuts would leave most builders without the ability to increase quickly construction once the economic environment improves."

"'Unless something is done urgently to address this problem, the capacity in the industry will be cut to a level which will take a long time to build up and it will not be able to meet the inevitable pent-up demand,' he said."

From This Is Money UK. "Debt-laden housebuilder Barratt has been telling suppliers it will not be paying some bills in June. Analyst Chris Millington said: 'I would be surprised if they are not trying to hold onto cash. It is a perfectly sensible business practice, but obviously the knock-on effects for others are not good. I don't think Barratt will be the only ones doing it. It's a sharing of the pain if you like.'"

The Pioneer Press. "One of the state's largest home builders has filed for Chapter 11 bankruptcy reorganization, citing declining home sales and tight credit markets."

"Lakeville-based MW Johnson Construction Inc. and its Florida operation both will remain open but require immediate financing to cover operating expenses and payroll while they restructure, according to documents filed Friday in U.S. Bankruptcy Court in St. Paul."

"The two companies reported combined liabilities of between $60 million and $150 million. The filing indicates assets in the same range."

"Owner Bill Johnson...said the company is 'deeply saddened by this outcome.' 'Our lenders have recently made it very clear that Chapter 11 is the only option they will accept at this point,' he said."

From Marketplace. "From Chicago Public Radio, Ashley Gross reports: 'Justin VanVooren is showing me a dusty field in a village called Sugar Grove, about 45 miles west of Chicago.'"

"Gross: 'So we're standing on corn husks here. What have you been hoping for this area to be?' Justin VanVooren, Sugar Grove's finance director: 'The intent is to have a new downtown in this area, stores close to the street...' Instead, the site is still just a dried-up cornfield. The developer pulled out last year."

"The village more than doubled in size over the last eight years as Chicagoans moved to the suburbs. But about two years ago, that growth ground to a halt. The development was supposed to have 2,500 homes built around its own town square, but after two years, only about 130 homes have been built. The developer, Kimball Hill, filed for bankruptcy in April."

"Mike Cohoon is shoveling dirt for a fence he's building around his house in this new residential community in Sugar Grove. Cohoon: 'You have major builders that are completely gone off the map right now that three years ago, they were rocking and rolling with building houses, turning houses as fast as they can. We don't have a town, but we have a house, so can't complain, right?'"

The Buffalo News. "M&T Bank Corp. sued German banking giant Deutsche Bank AG Monday evening, accusing the global investment banking powerhouse of knowingly selling M&T unsafe mortgage investments."

"The complex layered securities were ultimately backed by 'subprime mortgages.' But the investments were highly rated by two of the nation's major debt-ratings agencies, Standard & Poor's and Moody's Corp., giving the bank some comfort."

"In its lawsuit, M&T claims Deutsche Bank deceived M&T by claiming the two securities it sold were 'safe, secure, and nearly risk-free' - even safer than corporate debt and nearly as safe as Treasury bills."

"In fact, the suit says, Deutsche Bank knew that its underwriting standards and due diligence had deteriorated, and bank officials were already experiencing problems with subprime loans and collateral 'under their control' in 2006 and early 2007."

"Also, M&T claims the ratings from Moody's and S&P were also 'fraudulent and false' because Deutsche Bank allegedly withheld information from the ratings firms, including about fraud with some of the loans and the refusal by the loan originators to stand behind them."

"In the end, M&T cut the value of all three investments from $132 million to just $4.4 million less than a year after buying them."

"'If M&T had been aware of the true facts . . . M&T would not have purchased the notes,' the bank said in the 51-page suit."

The Plain Dealer. "The foreclosure crisis in Cuyahoga County and other urban communities is now largely a matter of cleaning up a mess that one Cleveland official called 'Hurricane Greed' during a congressional field hearing Monday at Cleveland State University."

"'We are trying to recover from devastation . . . devastation from unchecked predatory lending practices,' said Chris Warren, chief of regional development for the city of Cleveland. 'This has been a murderous, unnatural disaster. One that has wiped out decades of patient, community development work.'"

"During the session, members of Ohio's congressional delegation listened to and echoed calls for investigations and prosecutions of mortgage fraud."

"The hearing was part of the subcommittee on housing and community opportunity, which is chaired by Rep. Maxine Waters, a California Democrat. Waters was joined at Monday's hearing by Reps. Stephanie Tubbs Jones, Dennis Kucinich, Betty Sutton, Marcy Kaptur and Charles Wilson, all Ohio Democrats."

"Kaptur, who represents the Toledo area, called the subprime lending model a 'Ponzi-like scheme.'"

"'I believe it incumbent that Congress authorize a full independent investigation of the roots of this crisis that traces back to the unstable period following the savings-and-loan crisis in the late 1980s,' she said."

"High-risk, subprime mortgage lending has existed since the mid-1990s. The subprime lending boom began in 2002 as interest rates dropped to historic lows, leaving mortgage companies and Wall Street with excess billions to spend and invest. That boom went bust in 2007 as real estate prices plummeted, leaving people owing more than their homes were worth."

"Subprime lending peaked in Cuyahoga County in 2005, federal mortgage data show. Nearly $1.6 billion in subprime loans were originated that year in the county. The number dropped to $1.4 billion in 2006. Today, few subprime programs remain."

"In poorer cities like Cleveland, abandonment of homes is accelerated by foreclosures. The city has an estimated 10,000 vacant or abandoned properties. Cleveland Councilman Tony Brancatelli, who represents the hard-hit Slavic Village neighborhood, calls those properties: '10,000 points of blight.'"

"A better place to host a congressional hearing on foreclosures Wednesday might have been East 144th Street. On this boarded-up and overgrown half-mile block of Cleveland, there have been foreclosure filings against at least 37 homes since 2006."

"Retired factory worker Lloyd Allen has taken it upon himself to tidy up the house next door to him, another foreclosed property. When thieves broke out the third-floor window and left the glass on the lawn below, he cleaned it up."

"'When I moved here, it was beautiful,' said Allen, a 50-year resident of the street. 'The homeowners were older people. Now they've passed away, the kids took over the property and started renting to anybody.'"

"He, like other neighbors, complained about the crime the empty houses breed. 'I bet there's not an abandoned house on this street that has any copper in it.'"

"He cuts the grass on the front yard of the empty home next door 'because it looks good for my property.' Anne Spires owes him a thank you, although she doesn't know him. The South Carolina woman bought the home next to Allen through a bank sale, with a partner."

"She has never seen it. When contacted by a reporter, she said: 'I'm looking for someone to rent it.'"

The Associated Press. "U.S. Rep. Maxine Waters, who chairs the subcommittee on Housing and Community Opportunity, told an audience at Cleveland State University that she hopes the House can negotiate a foreclosure rescue package with the Senate that will reach President Bush's desk by July 4."

"In January, Cleveland sued 21 of the nation's biggest mortgage leaders, seeking to win hundreds of millions of dollars that it wants to use to rebuild neighborhoods devastated by the subprime lending crisis."

"The defendants include both sides of a pending $4.1 billion takeover -- Bank of America and Countrywide Financial, which will be bought by BofA. The acquisition will make Charlotte-based Bank of America Corp. the nation's biggest mortgage lender and loan servicer."

"Michael Gross, a managing director for Countrywide, told the panel that the company has refused to join other Ohio lenders in a compact to curb foreclosures because it services nine million loans across the nation and must maintain consistent loan standards in every state."

"'Countrywide can't get off just with the sale to Bank of America,' Waters told Gross. 'You have become a poster child for what is wrong.'"

"Questions linger about the sweetheart loans Senator Christopher Dodd got in 2003 from Angelo Mozilo. At the time, Mr. Mozilo was chairman and CEO of Countrywide, which would become a leading player in the subprime-mortgage crisis and would benefit greatly if Congress passes Sen. Dodd's lending-industry bailout bill."

"Does anyone believe Sen. Dodd when he says he and his wife did not 'anticipate any special treatment' from Countrywide and were unaware they got it? As ranking member of the Banking Committee (he's now its chairman), he was keenly aware of mortgage rates in 2003."

"Yet he implausibly suggests Countrywide issued him and his wife two subprime loans totaling $781,000 and charged them below-market rates, waived $10,000 in fees and points, and ultimately saved them $75,000 simply because they 'shopped around.'"

"What's the difference between accepting sweetheart mortgages and unsolicited bribes? Was Sen. Dodd's bailout bill that would shift $300 billion in non-performing mortgages - Countrywide alone holds $6 billion - from reckless lenders to taxpayers the quid pro quo payoff?"

"Did Sen. Dodd illegally accept special loans offered solely because of his position? Did he violate Senate rules that bar members from receiving gifts worth $100 or more a year from companies that have registered lobbyists?"

"When will Sen. Dodd come clean? When can Americans expect the criminal and ethics investigations to begin?"