A day before it was set to go under the gavel, the sale of Sex.com stalled. The domain name was set to be auction, but an involuntary Chapter 11 filing by three of the company's creditors has put the brakes on the bidding. Escom LLC, which owns Sex.com, his on the hook, it seems, for an eight-figure tab.

The creditors' petition, filed in U.S. Bankruptcy Court shortly after noon yesterday by Washington Technology Associates, iEntertainment, Inc. and AccountingMatters.com LLC, claims that Sex.com owes them $10,092,118.68, according to a report by adult entertainment industry trade publication AVN (NSFW).

Luckily for American International Group Inc. (NYSE: AIG), the embattled insurer has agreed to sell its AIG Finance unit to China Construction Bank for $70 million in cash. This news is helping to offset some distinctly less bullish developments for AIG today.

Specifically, Patrick Fitzgerald of Dow Jones Bankruptcy Review reports that Lehman Brothers Holdings (LEHMQ) is asking a bankruptcy judge to force AIG to pony up millions of dollars it owes Lehman for credit default swaps.

The word in the rumor mill is that Senator Schumer is in talks with Citigroup (NYSE: C) to get its backing for legislation that would allow judges to set new repayment terms for millions of mortgage holders who end up in bankruptcy court. Legislation to this effect was introduced this week.

It is hoped that Citigroup's lead on this issue will encourage other banks to join in backing the proposed legislation.

Plans to lower interest rates are helpful but may not stabilize the housing market because banks have tightened their lending standards making it more difficult for prospective buyers to get a mortgage. In addition, it does not help those who are already in foreclosure.

Foreclosures are fueling a downward spiral in home prices. Any legislation to stem this tide is a step in the right direction.

Meanwhile, pending home sales dropped to their lowest level since 2001 when the data was first collected.

Do you think this move will stem the foreclosures?