Another area of concern: Home equity loans. These are loans made on homes that are subordinated to the original mortgage. They carry a higher interest rate than first mortgages. Borrowers usually take money out to remodel a home, buy a car, pay for college or simply take a nice vacation. All are worthy endeavors. Except the loan has to be paid back. Many of these home equity loans are made with the idea that a house would be sold in a short time, and the first mortgage as well as the home equity loan would be paid with the proceeds.

The difficulty arises when the house doesn't sell or doesn't sell for enough money to pay for both loans. Either way the lender ends up sucking wind, especially the home equity lender since that loan is paid only after the first loan is paid completely. While home prices were escalating every month, these home equity loans made a lot of sense. Now that fortunes have changed, everyone is scratching their collective heads and wondering how anyone could make a loan based on the assumption that home prices only go one way. Such is the nature of humans and lending money.

So there are two very pronounced possibilities for further problems for lenders: teaser rates that come current and home equity loans. Again, no one can guess the depth of these possible losses until they actually occur. That's on a month to month basis. Each month they don't happen is a short lived sigh of relief until the month wears on and another anxiety attack begins.

These aren't all of the problems lenders have, but they are the ones in the forefront, right after the subprime loans. However, if interest rates continue to go lower, if lenders work with their borrowers to modify terms, and if housing prices stop going down, lenders can start breathing a lot easier. So can investors who hold their stocks.