Wall Street may whack more subprime lenders?

It's not news that the real estate sector is hurting, none more so than subprime lenders. Lots are folding up, the most recent being EquiBanc Mortgage Corp., a unit of Wachovia, which has decided to shut down the unit. Wall Street firms have been in retrenchment mode. In some cases, they are closing off the liquidity spigots--consider Ownit Mortgage Solutions, which went bankrupt recently. JPMorgan Chase notified the company in November that, because it  was in default, it was shutting down its $500 million credit line. Ouch! We'll likely see a lot more of this going forward, unless the market stages a strong surge soon. Merrill Lynch, which owned 20 percent of the company, ultimately declined to bail it out--sealing its fate. Securitization can help reduce risk to a high degree, but it can't eliminate it.

For more:
- here's a New York Times article