Josh, I think this is worrisome too. I think these lending guidelines will be more about tighter underwriting guidelines, rather than eliminating these loan products. What concerns me is that the OCC has jurisdiction only over some banks and thrifts, and not private lenders like H&R Block’s Option One. So banks like Wells Fargo and Washington Mutual will cut back on these loans, and Option One and others will pick up the slack.

On a related note, do the appraisers and realtors have any comments on how much looser the lending guidelines are getting? I say this because WaMu’s neg-am income increased 10x from Q1 05 to Q1 06. It seems the lenders are lowering their lending standards, in a desperate attempt to keep up volume as sales and loan volume is declining.