Market Watch - "Higher inflation, weaker spending in February" (3-30-07)

"The Fed's dilemma is getting tougher. Core consumer prices increased at the fastest pace in six months during February, even as consumer spending slowed to the weakest in six months, according to government data released Friday."

CNN - "For mortgage market, it's prime's time" (3-30-07)

"The subprime mortgage mess means fewer loans for people with bad credit. What about top-flight borrowers?"

Bloomberg - "Bank of America Warns of New `Correlation Crisis' (Update1)" (3-30-07)

"U.S. homebuilders may trigger a 'correlation crisis' similar to the credit sell off in 2005 when Ford Motor Co. and General Motors Corp. lost their investment-grade credit ratings, according to Bank of America Corp.'s securities unit."

NAR - "NAR Forsees Short-Term Impact on Housing Market From Subprime Reforms" (3-30-07)

"Current market problems and reforms in the underwriting and pricing of subprime loans, including the tightening of underwriting standards by regulators, will have a short- term impact on housing markets. That will be lessened if Congress enacts legislation to expand the roles of Fannie Mae, Freddie Mac and the Federal Housing Administration to provide more housing opportunities to lower-income homeowners and those living in high cost metropolitan areas, the National Association of Realtors® said today. NAR Senior Vice President and Chief Economist David Lereah predicted that tighter underwriting practices may cause total home sales to fall by about 100,000 to 250,000 nationally, or no more than 3 percent a year over the next two years. Many of these households will probably, over time, purchase a home when they have attained the financial capacity to do so by saving for a down payment or growing their income."

News 10 - "Housing's Dark Side: Mortgage Mayhem Up" (3-30-07)

"The California Association of Mortgage Brokers is holding workshops across the state to educate homeowners on their loans. The goal is to help families protect their credit, avoid defaults and foreclosures."

Bloomberg - "M&T, Buffett Holding, Says Alt-A Loans Hurt Profits (Update1)" (3-30-07)

"M&T Bank Corp., the western New York bank partly owned by Warren Buffett's Berkshire Hathaway Inc., said low bids for the Alt-A mortgages it planned to sell will cut first-quarter profit by $7 million."

Bloomberg - "Fed Risks Moral Hazard as Housing Market Melts: Mark Gilbert" (3-30-07)

"The hangover from that borrowing binge is beginning to hurt. Evidence is building that the U.S. economy is slowing sufficiently to warrant a soothing reduction in interest rates from the Federal Reserve. That poses an interesting dilemma for Fed Chairman Ben Bernanke."

Real Estate Journal - "After Financing the Housing Boom, Wall Street Shuts Off the Spigot" (3-30-07)

"By extending generous credit to subprime lenders, Wall Street firms financed the borrowing binge that helped fuel the housing boom. Those firms now are turning off the money spigot. They see more borrowers having trouble paying off those mortgages in a slowing economy, which has made investors less willing to pour money into the sector. More than two dozen subprime mortgage lenders have closed shop, and there is concern that the defaults could spread to other types of risky loans and to less-risky mortgages, exacerbating the housing market's slowdown and possibly weighing on the economy. Accredited Home Lenders Holding Co., a subprime lender, recently was forced to sell $2.7 billion of loans at a big discount to meet lenders' demands for more collateral."