The sub-prime market was the first to experience the crunch but it is certainly not the only sector.

American Home Can’t Fund Loans, May Liquidate Assets
By Bradley Keoun

American Home Mortgage corporate offices in Irving, Texas

July 31 (Bloomberg) — American Home Mortgage Investment Corp. shares plunged 89 percent after the lender said it doesn’t have cash to fund new loans and may have to sell off assets.

Investment banks cut off credit lines, leaving American Home without money yesterday for $300 million of mortgages it had already agreed to provide, the Melville, New York-based company said in a statement today. It anticipates $450 million to $500 million of loans probably won’t get funded today.

All of this comes on the heals of a rising default rate among even the more credit worthy segments of the market. Countrywide recently reported marked increases in the number of loans in default across their risk pools.
Look for the FICO models to be adjusted over the coming months.