IndyMac Bancorp Inc (NYSE: IMB) said last night the market for mortgage-backed bonds has become "very panicked and illiquid."

Additionally, last night American Home Mortgage Investment Corp (NYSE: AHM) announced it would be closing most of its operations today, with nearly 7,000 employees losing their jobs.

Earlier, BloggingStocks blogged about Positive Carry, a 124-foot yacht that is now up for sale from former hot-shot mortgage trader John Devane of United Capital.

The great long-time investor John Templeton used to say look for points of maximum pessimism for investment opportunities. The mortgage market is definitely at one of those points today.

However, this might be one point of maximum pessimism investors may want to avoid. Mortgage-backed securities are typically purchased by institutions who borrow to purchase these securities. The ability to borrow is now gone or greatly reduced meaning a lot less buying power in this market. This also means housing prices are going to get a lot weaker than anyone anticipated.

Both the housing and mortgage markets are two points of maximum pessimism investors can afford to miss for now. This is one leverage mess that will take time to work out.