Short sales are not the real issue right now, Countrywide is facing the same liquidity crisis that most banks are facing. Countrywide was considered safe not more then a month ago, but like American Home Lending, it could be gone soon as well.

It's not pretty right now, Countrywide rep's in California we're leading the country in loan origination for years, they have a pretty good share of the blame for these "exotic" Arm's and other products that have become wildly popular.

Banks that should "Survive" at this point would be LARGE institutional banks that are founded to service more then mortgage loans, Chase, Wells Fargo, US Bank, Bank of America or companies like Credit Suisse.  Stay away from anyone who smells like they trade their paper on Wall Street, or was known for their varied loan programs.

Don't be surprised to see local mortgage companies go out of business as well as this slaughter continues.  I've worried somewhat about the companies I've worked for as well. Luckily I just moved to a shop that isn't connected to a number of warehouse lines, but the writing is more then on the wall, we're all in for some ROUGH sea's.

Please, if I see anyone spinning this as no big deal I'm going to get sick to my stomach. I will however say that there will be banks left that lend money when this is all over. The problem is that no one is going to get a loan without a good down payment. No one is going to be able to qualify on just their good looks and credit again.  The numbers of mortgage agents, brokers, lenders, vendors, lead companies, and yes real estate agents will be far lower in 2008 then in 2007.   One estimate I heard is 3 out of every 10 people in the business will be gone by 2008. Now that's a scary number.

What most American's don't even realize is this could spill over into the general market.  Wall Street is holding their breath that this sub prime situation doesn't blow the whole market up.