The more you watch (the news) the less you know as Danny Schechter puts it. Business as usual.

May 2007: The housing market has softened much more than is being reported. We have been advising our retainer clients for more than one year about misleading national sales information, both with the Existing Home Sales and New Home Sales data. We are now going public with our concerns because we are concerned that policy makers are relying on national data to conclude that the housing market correction has not been severe…  realestateconsulting.com

What John Burns Real Estate Consulting is not alone noticing the trends. Moreover the rumor is spreading.

May 28: The deterioration in the US housing market is accelerating, new figures showed yesterday, and at a faster rate than Wall Street had been expecting. With the number of house sales in April down 2.6 per cent on the same month last year, the average selling price for homeowners who do find a buyer has started to fall. And the data contained little evidence to support the economic optimists who argue that the worst is almost over, since the backlog of unsold homes also climbed. Analysts blamed the worsening figures on the so-called “sub-prime” mortgage market, which has effectively dried up. Mortgage companies have sharply curtailed their lending to Americans with poor credit histories, after rising arrears sent several lenders into bankruptcy and attracted the attentions of politicians, who are investigating unscrupulous lending practices…. news.independent.co.uk

While last week, the numbers aligned by the government were kinda rosy, an AP headline was telling the exact opposite: US home sales fall as property glut hits record high.

In the baltimorexaximner.com, one could read that U.S. Sen. Chris Dodd, D-Conn., has called on the Federal Reserve Board to implement tougher guidelines on lending practices to avert a market crash. Economnists seems to agree: there is a foreclosure ‘bloodbath’ on horizon.

Many mortgage lenders expected a subprime meltdown, but not one that came so fast and strong reveals a CNN article as of May 23/07. Now they say it’s hitting harder and faster than expected - even to those who predicted the crisis in the first place. 

Of course, the following shouldn’t come as a surprise either:

May 23, 2007- Mortgage Industry Spends $210 Million to Woo Congress — In an effort to determine why mortgage foreclosure rates are so high, advocacy group Common Cause recently completed a study, and in turn a shocking report. According to the group’s findings, a large portion of the blame may lie with the mortgage industry, which spent a total of $210 million on lobbying and campaign contributions in an effort to deter new lending laws… According to Common Cause:

• Between 1999 and 2006, the ten largest subprime mortgage lenders and their two trade associations (one of which is the MBA) gave a total of $22 million to federal candidates.
• Between 1999 and 2006, these same groups spent $187 million lobbying in Washington.

So what did they get for their buck? According to Common Cause, the money encouraged Congress to turn a blind eye to the shady practices that were becoming the norm among many lenders…

All this sounds all soooo deja-vu, doesn’t it?