Some housing bubble news from Wall Street and Washington. Bloomberg, "Bank of America Corp. will buy Countrywide Financial Corp., the home lender battered by the collapse of the subprime mortgage market, for about $2.5 billion, 37 percent less than originally planned. Bank of America is discarding the Countrywide name, which has become an icon of the mortgage industry's boom and bust, and Countrywide's penchant for loans more prone to default, such as subprime mortgages."

"Countrywide's biggest challenge is its $27 billion pool of option adjustable rate mortgages, which let borrowers skip part of their payment and add the balance to their principal, said Stuart Plesser, an analyst at Standard & Poor's. Delinquencies on Countrywide's option ARMs totaled 9.4 percent at the end of the first quarter."

"As shareholders were preparing to approve the deal on June 25, California and Illinois sued the lender for allegedly luring borrowers into risky loans they couldn't afford."

"Washington Governor Christine Gregoire announced plans to fine Countrywide for alleged discrimination against minority borrowers and asked that the company's license to lend in the state be revoked."

"Countrywide Financial Corp. was accused in a complaint by Florida of fraudulently making loans to homeowners who couldn't afford to repay them. Attorney General Bill McCollum said in a complaint filed yesterday that the company and its founder, Angelo Mozilo, had violated the state's deceptive trade-practices law."

"'Subprime loans were approved for borrowers who were not qualified and could not afford such loans,' McCollum said in the complaint, which seeks unspecified damages for consumers hurt by the company plus $10,000 fines for each violation of the state's laws."

The LA Times. "Angelo R. Mozilo struggled last week to bid farewell to No. 1 home lender Countrywide Financial Corp., the company he led for 39 years only to see it toppled by misadventures in high-risk mortgages."

"The usually silk-smooth Mozilo garbled words and at one point knocked over his microphone at a special shareholder meeting. Looking grim and sounding resigned, he said the era of independent home lenders like Calabasas-based Countrywide was at an end."

"'He was an admired and feared competitor,' said Paul Muolo, an editor at National Mortgage News. 'But now his reputation is trashed.'"

"Mozilo's downfall was his lust to have Countrywide become the biggest provider of every kind of mortgage, Muolo said. The end of the Countrywide story was 'a total disaster,' Muolo said. 'His ego sank him. . . . He had to be first in everything.'"

"Mozilo also faces investigations by the SEC and federal prosecutors into his exercises of stock options. And his reputation for regarding Countrywide as a personal fiefdom has been reinforced by recent accounts of how he intervened on behalf of politicians, athletes and other 'friends of Angelo' to give them mortgages on highly favorable terms."

The Hartford Courant. "Sen. Christopher J. Dodd brought his message of urgency for passing federal mortgage relief back to his home state Monday - on the front lawn of a Spring Street homeowner whose mortgage is in foreclosure."

"'We're running out of time here,' Dodd said. 'You're going to have the August break [for Congress] and, of course, the elections. If this thing goes much longer, the value of it is going to be a lot less.'"

"The longer passage of the bill is held up, the more people will slip into foreclosure, Dodd said."

The Christian Science Monitor. "In Mesa, Ariz., officials are trying to decide what to do about boarded-up McMansions that become party pads, trashed in raucous 'raves' where invitations come by text message."

"In Atlanta, thieving from abandoned properties is so bad that police caught one man building a new house entirely of pilfered materials from empty homes."

"Flint, Mich., has had to add firefighters and ladder trucks recently even though its population has declined. Up to 90 percent of fires start in homes where no one lives."

"(On) Drummond Street, in the shadow of Clark Atlanta University... once a lively street, half the bungalows and shotgun-style houses are boarded up, with trash strewn about. Here, as elsewhere, the falling market has pierced holes in inflated appraisals used to write mortgage notes."

"Bobby Todd, who has lived here 35 years, now sweeps sidewalks and trims hedges around the empty homes next to his. The mostly young, college-educated speculators bought new pickup trucks with money that he says should have gone into fixing up the houses - and then left when the market tanked."

"'They thought they could come make a profit, but they didn't and they just left it,' he says. 'I'm an old man, and now I'm working for free.'"

The Star Bulletin. "Bankruptcies are on the rise in Hawaii, due mostly to a higher percentage of filings related to real estate problems."

"'A higher percentage of people filing bankruptcy have real-estate-related problems, much more than two to three years ago,' said Honolulu bankruptcy attorney Stuart Ing. 'The vast majority are not out of work, but the pay is roughly the same, and we have people who just have too much in credit card debt and loans.'"

"Many Hawaii residents also have investment properties on the mainland, which are facing foreclosure and debt, he said. Some Hawaii residents invested in mainland real estate but had to surrender because they could not generate enough rental income to cover the mortgage or could not sell the properties."

"Eli Broad, the philanthropist and founder of KB Home, said the growing number of vacant U.S. homes, mortgage-related losses at banks and declining consumer confidence have convinced him investors are 'better off in cash' right now."

"Broad called for Congress to pass a housing stimulus bill that would provide a tax incentive for first-time home buyers and guarantee up to $300 billion in refinanced mortgages. 'It's sad that we haven't passed a housing bill,' Broad said. 'Hopefully that will happen after the Fourth of July.'"

"KB Home reported its fifth straight quarterly loss June 27. The company, the fifth-biggest U.S. homebuilder by revenue, has lost two- thirds of its value since the beginning of 2007."

"A record 18.6 million U.S. homes stood empty in the first quarter, 5.7 percent more than a year ago, according to the Census Bureau, as a growing number of mortgage borrowers lost their property to foreclosure."

The Detroit Free Press. "The volatile story of home sales and prices in America is told starkly in the financial reports of Pulte Homes Inc., during the five years that Richard Dugas Jr. has been CEO of the Bloomfield Hills-based company."

"Good times became great times and then fabulous times, but quickly crumpled into today's deeply disturbing times."

"'The U.S. economy is at risk. This is not just a housing crisis,' Dugas said Monday, on the eve of his fifth anniversary today as Pulte's CEO."

"Dugas and the CEOs of other large U.S. home builders are pushing for a big tax credit on home purchases as part of a broader package to deal with the subprime lending crisis and related epidemic of home foreclosures."

"Helping people to avoid foreclosure and stay in their homes is a worthy goal, Dugas said, but that alone will not stimulate home purchases. And without home buyers, housing prices keep sinking, leaving more and more Americans wondering how low they can go."

"When Dugas took the reins at Pulte in mid-2003, the firm was solidly profitable, and the stock price was about $15 a share, adjusted for subsequent splits and dividends."

"Then the market went crazy. Housing prices nationwide zoomed 12% to 13% a year in 2004 and 2005, much faster than the historic average of 5% annually. Pulte sales soared from $8.8 billion in 2003 to $14.7 billion two years later. Profits leapt 140%, to $1.5 billion in the same period. Pulte's stock price tripled to $46 a share."

"But that was then. The U.S. housing market stalled early in 2006 and has weakened since."

"In 2007, Pulte posted a $2.3-billion loss. Its stock price has skidded below $10, closing Monday at $9.63 a share, down 44 cents on the day."

"Pulte, one of the nation's largest home builders, has written off $3.7-billion worth of value in land that it owned or had optioned before housing crash. In late 2005, Pulte owned or controlled more than 360,000 lots around the country. Now it has fewer than 150,000, after selling some and letting options expire on many others."

"'It's a little scary overall,' Dugas said, noting that Pulte and other new-home builders have cut prices 10% to 20%, but can't afford to cut further because of the rising cost of materials."

"Right now, a tax credit of $8,000 for first-time home buyers has a chance of approval by both the U.S. House and Senate. And although Dugas would prefer to make all home buyers eligible to produce a big-bang impact on sales, 'anything is better than nothing,' he said."

The Kansas City Star. "Single-family housing construction continued to drop in metropolitan Kansas City in May, with the number of single-family permits off substantially from a year ago."

"There were 218 single-family permits issued in May, down 62.2 percent from the 577 issued the same month a year ago, according to the Home Builders Association of Greater Kansas City. Just two years ago, when the local housing market was still booming, there were 929 permits issued."

"Tim Underwood, CEO of the Home Builders Association, said said a temporary home buyer tax credit included in the American Housing Rescue and Foreclosure Prevention Act of 2008 should provide a significant boost to the housing market."

"'The home buyer credit would address many issues of the current housing downturn,' Underwood said. 'The tax credit would boost sales, lower new-home inventories and stabilize both home prices and the mortgage markets.'"

The Ballard News Tribune. "Although prices of single-family homes have dropped about 8 percent in a year in Ballard, experts feel the local market is still strong. Despite the constant drumbeat of housing doom and gloom reported nationally, Ballard's single-family home market is still rosy but has a few faded blooms."

"Inventory of single-family homes and townhouses for May and June is 222, nearly double that of last year's listings, and average time on the market is now two months, twice last year's. Still, area realtors and lenders say the market is relatively strong."

"'The best stuff, like a sweetheart of a house on a pretty street in a nice neighborhood is getting full price, sometimes higher,' said Michael Busacca, a realtor with Skyline Properties' Northgate office."

"Busacca lives in Green Lake and has a listing in Sunset Hill for $622,000."

"'Lower-end housing sold quickly between 2002 and 2007,' he recalled of the bygone boom. 'Now people are more particular if a house has an Achilles' heal, like small bedrooms, cat or smoke odor, or if it's on a real busy street. Prices on those are dropping, but it's pretty tame compared to the rest of the country.'"

"'Once, lenders gave anyone with a pulse a loan. Now, there are plenty of legitimate first-time buyers but programs have dried up,' Busacca said."

"'The media beats us up,' complained realtor Kevin Isaminger in Bellevue, who has listings in Ballard, and West Seattle where he lives. He said potential buyers lack confidence in the local market due to pessimistic news reports of troubled markets in other regions."

"'It used to be a breeze to sell. Now a buyer takes all the time he wants. With so much inventory comes randomness where a nice house is sometimes overlooked,' he said."

"Isaminger said that most of his clients are good friends, like Jason and Adrienne Rice. They live in desirable Sunset Hill, but on busy 32nd Avenue Northwest, and feel their charming three-bedroom craftsman house Isaminger listed nine months ago has sat due to traffic, and the economy."

"'We keep getting told by buyers, 'Your home was our second or third choice,' said a frustrated Adrienne."

"Isaminger lowered their house to $499,950."

"Suzanne Lambalot has lived in Sunset Hill for 31 years (and) is a veteran Ballard area realtor. While she agreed that the busy street might play a role in the Rice's listing woes, she said business has been percolating in Sunset Hill recently."

"She agreed with Isaminger's view that the press is partly to blame for the slower market. 'We (realtors) say don't pay attention to the national media. Pay attention to the local market,' she said. 'Seattle is insulated.'"