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We picked an eventful couple of days to take off. We’ll be back soon. A few important headlines and events:

--NovaStar Mortgage Wholesale suspended funding today. From Blown Mortgage: ‘Due to severe dislocation in the secondary market, NovaStar Mortgage Wholesale is temporarily suspending approval and funding activity on all loan transactions that have not been locked...’

-- Standard & Poor’s Corp. downgraded to negative its credit-rating outlook for Bear Stearns Cos. The blue chips fell 281 points. It certainly didn’t help when Bear Stearns effectively said, yes, things are bad: ‘Sam Molinaro, the chief financial officer at Bear Stearns, stunned the market when he said the current turmoil in the bond market, in which investors are fleeing any securities with substantial risk, was worse than the bursting of the tech bubble early this decade and as bad as any financial crisis in at least 22 years.’

Wells Fargo and Wachovia announced cutbacks in some mortgage products: ‘Wells Fargo, Wachovia and other lenders are limiting mortgages to some of their more creditworthy borrowers as worries about U.S. homeowner defaults widen. ... Wells Fargo, the second-largest U.S. mortgage lender, said it is curtailing issuance of ‘Alt-A’ home loans through brokers, while Wachovia has stopped entirely. Wachovia also said one lending unit has temporarily halted its Alt-A production.’

We’re interested in hearing your thoughts on this. Is the mortgage market in such a period of crisis that some sort of government response is necessary? Or is this a natural, and healthy, correction of a market that had become way too easy with its money?

Photo Credit: Reuters