NAR - "Existing-Home Sales Rise in November, Market Likely Stabilizing" (12-31-07)

"Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors®. Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006."

Bloomberg - "Citigroup, Goldman Cut LBO Backlog With 10% Discounts" (12-31-07)

"Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. are offering discounts of as much as 10 cents on the dollar to clear a $231 billion backlog of high-yield bonds and loans. While lenders reduced the overhang by 32 percent since July, they are struggling to unload debt from this year's record $438 billion of leveraged buyouts after losses from securities linked to subprime mortgages reduced demand for higher-yielding assets, according to data compiled by Bloomberg. They sold some bonds at a discount of 10 percent to face value and loans at 5 percent below par, according to London-based Barclays Plc."

Bloomberg - "Treasuries Post Best Gain Since 2002; Data May Show Growth Fell" (12-31-07)

"U.S. Treasuries rose, posting their best yearly returns since 2002, before reports this week that may show the housing recession is slowing economic growth. Treasuries returned 8.7 percent in 2007, according to a Merrill Lynch & Co. index, as losses tied to subprime mortgages stoked demand for the safety of government debt. Ten-year notes yielded almost 1 percentage point more than two-year rates. Traders forecast the world's largest economy will slow enough to lead the Federal Reserve to cut interest rates at least twice in 2008."

Bloomberg - "Defaults on Insured Mortgages Rise 35% to Record" (12-31-07)

"Defaults on privately insured U.S. mortgages rose 35 percent in November to a record, an industry report today showed, adding to evidence the U.S. housing slump is deepening. The number of insured borrowers falling more than 60 days late on payments jumped to 61,033 last month from 45,325 in November 2006, according to data from members of the Washington- based Mortgage Insurance Companies of America. The missed payments, often a prelude to foreclosure, represented a 2.9 percent increase from October."

The Wall Street Journal - "Lender Lobbying Blitz Abetted Mortgage Mess" (12-31-07)

"During the housing boom, the subprime industry succeeded at more than just writing mortgages. It also shot down efforts by some states to curtail risky lending to borrowers with spotty credit. Ameriquest Mortgage Co., until recently one of the nation's largest subprime lenders, was at the center of those battles. Working with a husband-and-wife team of Washington lobbyists, it handed out more than $20 million in political donations and played a big role in persuading legislators in New Jersey and Georgia to relax tough new laws. Those victories, in turn, helped blunt efforts by other states to crack down on reckless lending, critics of the industry contend."

Los Angeles Times - "How a bank fell victim to loan fraud" (12-31-07)

"'Everything was more lax,' said Jack Guttentag, a finance professor emeritus at the University of Pennsylvania's Wharton School. 'It was just easier to commit fraud.' Evidence of that can be found in FBI reports of mortgage fraud, which increased eightfold from 5,623 in 2002 to 46,717 this year. But of all those cases, few compare with an alleged three-year scam that used trumped-up appraisals to fraudulently secure $142 million in loans from Lehman Bros. and another lender."

The Guardian - "From the sub-prime to the ridiculous: how $100bn vanished" (12-31-07)

"The first real concerns about sub-prime mortgages emerged at the end of February, when Wall Street suffered its worst day since the terrorist attacks of 2001. By April one of the biggest sub-prime mortgage lenders in the US had gone bankrupt and there was talk of a full-blown crisis. Credit more broadly began to dry up as lenders became nervous."

Mish's Global Economic Trend Analysis - "Things That "Can't" Happen" (12-31-07)

"It is the very nature of the market that it takes the convincing of nearly everyone to believe that something cannot happen, to actually cause it to happen. Consider housing. Everyone became convinced that housing was a one way ticket north, that all housing was local, and housing would not decline nationally. This mass belief in a faulty housing premise in spite of evidence to the contrary in Japan is what helped form the US housing top. Greater fools everywhere who came to believe that faulty theory eventually rushed in to speculate in housing. That made the top. Even the rating agencies got into the act."

Option Armageddon - "Could Fan and Fred go bust?" (12-31-07)

"Perish the thought. Between them the two companies back well over $4 trillion of residential mortgages in the U.S. Underneath this pile of debt the companies have a tiny capital cushion of about $40 billion each. And that counts the $6 billion Freddie recently raised in a preferred stock offering."

Times Online - "Top economist says America could plunge into recession" (12-31-07)

"Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times."

Los Angeles Times - "Mortgage crisis takes a bite out of states and cities" (12-31-07)

"Dozens of states, counties and cities across the nation will enter the new year facing deep and unexpected budget holes as the widening mortgage crisis cuts sharply into tax revenue. Elected officials, scrambling to adjust, are trimming money for public schools, reducing grants to help the homeless, even asking police to dry-clean their uniforms less often."

Real Estate Journal - "Family Goes to the Court House To Stave Off Foreclosure" (12-31-07)

"These days, more homeowners are digging in their heels. They delay foreclosures by filing for bankruptcy on the eve of a court-ordered sale of the property, or by refusing to answer the door when the plaintiff tries to 'serve' them with a foreclosure lawsuit. They pay lawyers a few hundred dollars to file a motion that can buy them a little more time."