Some housing bubble news from Wall Street and Washington. Bloomberg, "Contracts to buy previously owned U.S. homes declined more than forecast in May, a sign prices that have been sliding for more than two years have yet to touch bottom. The index of pending home resales fell 4.7 percent, the National Association of Realtors said today. One in every 483 U.S. households either lost a home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said."

"That was the highest rate since the company began reporting in January 2005 and the 29th consecutive month of year-over-year increases."

"'It's definitely a different kind of market,' said Devin Reiss, owner of Realty 500 Reiss Corp. in Las Vegas. 'We used to sell homes in a day. Now, 50 percent of our sales are foreclosures.'"

"The PHSI, a forward-looking indicator based on contracts signed in May, remains 14.0 percent below May 2007."

"Lawrence Yun, NAR chief economist, said some pullback after a sharp increase in the previous month was expected. 'The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy,' he said."

"Shares of Marshall & Ilsley Corp., Wisconsin's largest bank, fell Monday after the bank said it had an unexpected second-quarter loss as housing developers failed to repay their debts. The lender set aside $900 million to cover bad loans in the quarter as mortgages made in once-booming warm-weather states soured."

The Whittier Daily News. "IndyMac Bancorp Inc. will lay off more than half of its employees and will no longer offer fixed-rate home mortgages, Michael W. Perry, the bank's CEO said in a prepared statement."

"Perry also announced that the Federal Deposit Insurance Corp. has downgraded IndyMac's lending status from 'well-capitalized,' which means the bank can no longer accept brokered cash deposits without a waiver by the FDIC."

"'IndyMac was one of the banks that was using relatively weak underwriting standards on the basis that housing prices would continue to rise in value,' said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, in an interview. 'With prices coming down, that became the bottom card in the house of cards built by these lenders.'"

"Barclays Plc, the U.K.'s fourth-biggest bank, will stop selling new loans at its U.K. subprime loans unit and shed about 300 jobs because customer demand is drying up."

"'In the past year we have tried a whole range of activities to develop our business but the market demand simply isn't strong enough,' FirstPlus Managing Director Neil Radley, said in the statement."

The Telegraph. "Abbey, Britain's third largest lender, has said it has increased the amount it requires borrowers to put down as a deposit on an interest-only loan without a proven repayment vehicle is 50 per cent, while it requires a 25 per cent deposit where a proven repayment vehicle is in place."

"Meanwhile, two high street lenders have tightened their general lending criteria to reflect the rising cost of living. Alliance & Leicester will assume a higher cost of living on its affordability calculator than in the past and there are also changes to working out how much the mortgage is going to cost."

"In addition, Nationwide is changing the maximum age limit by which time the mortgage must be paid off to 75. Prior to this there was no upper age limit as long as borrowers could afford the mortgage payments from their pension income."

"Rival lenders are expected to copy Abbey's decision. Ray Boulger, of mortgage brokers John Charcol, said: 'When one of the major lenders makes some changes, it is not unusual for others to follow.'"

The Daily Mail. "Re-mortgaging has collapsed as homeowners are put off by huge fees and expensive rates, experts said. The latest figures from the Council of Mortgage Lenders reveal a 'steep decline' in the number of people switching lenders."

"Figures show just 71,000 people re-mortgaged in May, a fall of 23 per cent compared to the same month last year. It is a dramatic U-turn from the booming re-mortgaging market of just a year ago when £500million was handed out in loans every day."

"Chancellor, Vince Cable said: 'The continuing fall in house prices comes as no surprise, but will bring more pain to homeowners. Since the start of the decade, house prices have soared out of control, unchecked by the Government and fuelled by irresponsible lending. With living costs spiralling and borrowing becoming ever more unaffordable, a housing market crash is inevitable.'"

The Guardian. "Auctions across the country reveal the same picture with auctioneers and vendors deadlocked. The former are telling the latter that if they want to sell their houses, they have to lower their prices significantly, but sellers can't afford to do it. Conversely buyers can afford to wait before taking the plunge, knowing that prices are more likely to fall this year than go up."

"'Let's start at 50, anyone for 50?' asks the auctioneer. The packed room remains silent until one angry man runs breathlessly through the crowd and stops the proceedings in their tracks. 'No,' he shouts. 'I told you I can't take less than 55."

"Charles Smailes, auctioneer at Feather Smailes & Scales in Harrogate, said: 'Demand has dropped to nothing. It's like the property market has fallen off a cliff.'"

"At their auction last week, 10 lots were offered but seven were withdrawn owing to lack of bids. Out of the 16 properties up for sale at the Southend auction, only nine were sold. Out of those nine, six were sold below their asking price."

"Trouble in Singapore's property market is brewing in the premium segment, which requires yield-seeking financial investors to support lofty valuations. After surging 72 percent in the two years through 2007, the price of freehold apartments in the prime districts fell about 5 percent in the second quarter of 2008, according to a property-consulting company."

"Luxury condominiums, many of which were being marketed last year as 'iconic,' are looking vulnerable. Take Goodwood Residence, located at the edge of the financial district. Guocoland Ltd.'s plan to sell a big chunk of this upscale apartment complex to a fund managed by Kuwait Finance House KSC's Malaysian unit has flopped."

"According to a July 2 report in the Straits Times newspaper, Kuwait's largest Islamic bank is buying only 36 units in the project, instead of the 97 it planned to purchase in December. The investor is now paying S$2,800 per square foot, or about 13 percent less than the price it agreed on in December."

"'Developers are cautious about releasing too many units,'' Chua Yang Liang, head of Southeast Asia research at Jones Lang LaSalle Inc., wrote. 'Buyers on the other hand aren't willing to participate aggressively as they are anticipating prices to moderate.'"

Oxford Business News. "Official figures show that year-on-year sales in May were down 36%. Residential sales were hit particularly hard - dropping from KD138.1m ($521.5m) in May 2007 to KD50m ($188.9m) in May this year."

"The Kuwaiti government introduced new regulations in the first half of this year in an effort to curb inflation. Perhaps most significantly, loans to the real estate sector became harder to obtain. This has had the effect of radically curbing liquidity available to potential borrowers, and demand has contracted accordingly."

"Sales in residential property have been in decline since the market peak last July. National Bank of Kuwait (NBK) figures published in April showed average house prices to have tumbled 60% between that peak and February 2008. Next month's year-on-year figures are likely to be even more severe."

From Business Daily. "The surge in property prices in Nairobi suburban area may soon start claiming casualties as consumers feel the pinch from falling rental yields."

"With some consumers already being forced to dig deeper into their pockets to meet monthly mortgage payments to supplement what rental incomes don't cover, this could force the level of mortgage loan defaults to rise."

"The Kenyan banking system is estimated to have given out house loans worth Sh20 billion."

"Even as the economy has slowed down, property prices have been rising far much faster than tenants are willing to absorb in rent. This has created a situation where increases in the inventory of vacant apartments - as new property developments are completed - have met with tepid demand from consumers, forcing landlords to either reduce rent or maintain it low to remain competitive in a difficult market."

"'The number of people seeking advice on what to do or looking for alternative ways to service their mortgages is rising by the day,' said Mr Justus Munene of Daytons Valuers, a property firm, and vice chairman of the Institution of Surveyors of Kenya (ISK)."

"'The heat is boiling under and if the trend continues and the current economic conditions do not change, it is only a matter of time before massive mortgage defaults begin,' said Mr Munene."

"The most recent data shows that property prices in the middle-income segment have nearly doubled in the past six months."

"Three bedroom apartments in Nairobi's Kilimani and Kileleshwa that sold at an average of Sh6.5 million in December are now priced at not less than Sh8 million, while in Mombasa, similar houses that sold at around Sh2 million are selling for not less Sh3.5 million."

"Data from property valuers indicate that the average annual rent earned in the middle to the top end of the property market is way below the industry guidelines on property profitability."

"In Kilimani and Kileleshwa areas, apartment complex after another - which years back were being bought even before the construction was complete - are now pasted with rental signs as opposed to sale, an indication that supply has outstripped demand."

"'High inflation means less disposable income for anybody in the middle-income and below, less savings hence less investment options as most people in that group are speculative investors, rarely long term,' said Terry Ryan, professor of economics and a member of the monetary advisory committee of the CBK."

"Mr Chris Chege, a senior relationship manager in charge of mortgages at Housing Finance, said the development could be a result of the way the Kenyan mortgage market is structured and the misinterpretation that rent income alone can service a mortgage loan."

"'Given the high loan to property value ratio in Kenya, rent alone is not likely service mortgage loans,' said Mr Chege."

"If the rentals are revised upwards, there will be fewer numbers of consumers able to rent such houses leading to low occupancy levels and low returns. The less bitter pill to swallow, it seems, is the revision of pricing downwards to encourage sales and to free up money tied up in the investments."

"Either way, the property market bubble has been pricked for the middle upper income areas in Nairobi."

The Boulder County Business Journal. "The share of expensive homes in foreclosure continues to rise in Boulder County. Homes with mortgages for half-a-million dollars or more accounted for 9 percent, or 52, of the 581 foreclosures filed in Boulder County through June of this year. That's up from 4.1 percent for the same six months a year ago."

"'Like a lot of people, I just got behind on payments,' said one owner of a local million-dollar-plus home in foreclosure. He agreed to speak anonymously to the Business Report."

"Now there is too much inventory to compete with - even among high-end homes - driving prices down and making it difficult to sell and cover the original loan. In the above homeowner's case, a majority of the homes in his small unincorporated Boulder County subdivision are for sale, he said."

"The homeowner is still employed, but he had banked on a stronger real estate market. 'A lot of people like us bought on an inclining market, and we put a lot of investment into the home assuming the value would rise,' he said."

The San Francsico Chronicle. "William Poole served as president of the Federal Reserve Bank in St. Louis from 1998 until March 31, when he reached the mandatory retirement age. He also served on the Fed's open market committee, which sets interest rates."

"Q: Should the Fed have done more to stop the housing bubble?"

"A: No, I don't think so. We all understood that the house price increases could not continue. We did not think through the possibility of a significant price decline and large-scale defaults and foreclosures."

"We understood there was abusive lending and practices that were stripping equity out of households. I don't remember the issue ever being raised that it could lead to defaults."

"Q: If the Fed had acted to protect consumers, might it have prevented the credit crisis?"

"A: Maybe. The people who should have known were the financial firms sinking huge amounts of money into this. The biggest problems were mortgage originators who were not federally regulated. At this period there was a continuous push by Congress to make mortgage credit more readily available to subprime borrowers. For the Fed to have acted would have been contrary to the intent of Congress."

"Q: Isn't the Fed supposed to be independent?"

"A: The Fed is independent up to a point. The financial community, the Fed, academics, didn't see the problem brewing."