Now It's Time to Deal with the "Liar" Loans

It's all happening so fast that you can barely stop to catch your breath. We knew that the Alt-A mortgages were going to cause the next wave of problems in the Mortgage Industry, but things seem to be moving faster than expected. The "Wall of Liquidity" is developing some serious cracks.

M&T Shares Fall After Bank Reports Weak Bids on Alt-A Mortgages

Shares of M&T Bank Corp., the western New York bank partly owned by Warren Buffett's Berkshire Hathaway Inc., fell the most since 1998 after saying low bids for Alt-A mortgages it planned to sell will cut earnings by $7 million.

The stock tumbled $9.18, or 7.9 percent, to $106.65 at 10:30 a.m. in New York Stock Exchange composite trading.

Shares of mortgage lenders have tumbled this year as defaults on subprime loans rose to four-year highs. Companies that offer less-risky Alt-A mortgages including IndyMac Bancorp Inc. and Impac Mortgage Holdings Inc. say investors are mistaking them for subprime lenders and unfairly punishing their shares.