Because the worst of the option ARM loans begin to mature through the last half of 2007 and all of 2008 there is more bad news coming.

Real estate professionals could be punished if Rep. Barney Frank, D-Mass, has his way. He wants to let delinquent subprime borrowers sue the investment bankers who bought the loans and turned them into securities. A major sea-change in mortgage lending would follow.

Big secondary market players like Lehman Brothers, Goldman Sachs and Merrill Lynch have largely escaped a full-blown consumer assault on them through the Tort Reform Act.

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