The mortgage bubble is now in complete collapse. Scarry part is the foreclosures havn't even hit the market yet. This will start in ernest over the next 3-6 months. Banks will put homes on market at whatever the loan balance is with little concern over what the neighbors stale listings are listed at. This will cause home prices to fall to the next level in a dramatic way. Economy will quickly be in recession and the current subprime headlines will be nothing compared to what is about to hit the ALT A and conventional markets. Problem there will actually be worse as the loan-to-values are often much higher than sub-prime. The Great Depression II is starting. Little can stop it and no amount of fed cuts can reduce the coming increase in risk premiums. Fed will have to lower 200 basis points just to offset the risk premium increases on subprime mortgages.