Shorts and Longs of the Mortgage Fallout

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From Barron's 3-19-07

If mortgage lenders are nearer a bottom, it may be a while before their financial prospects brighten. For instance, data from the Mortgage Bankers Association shows rising delinquencies last quarter in prime-quality adjustable-rate mortgages once low teaser rates were nudged up.

A midweek bounce off the indexes' early-March low helped contain the carnage. But the fear of slowing growth persists, and its bleak view has increasingly found voice. "Subprime is today's dot-com -- the pin that pricks a much larger bubble" in asset-dependent America, says Morgan Stanley chief economist Stephen Roach. "To me, the real debate is about 'spillovers' -- whether the housing downturn will spread to the rest of the economy."

Here are a few companies that will continue to feel the effects of the mortgage fallout.

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