News in the housing market has gone from bad, to worse, and back to bad again. Real estate and mortgage markets that are starting to stabilize after hovering on the brink of disaster during much of the summer. (Update: Housing numbers released August 24 showed an uptick in new home sales in July over June -- a positive surprise). Central banks around the world, including the U.S. Federal Reserve have bolstered a financial system crippled by excessive sub-prime lending.

Still, many experts believe the financial crisis could worsen from here, dragging more homeowners and would-be homeowners into the mess. Given all this, you are probably wondering what the mortgage meltdown means to you. Let's look at these questions:

What if you have a mortgage with a company that goes bankrupt, do you still have to pay?

Yes. If your mortgage company files for bankruptcy, another company will take over the servicing of the mortgage. The new owner of your mortgage will expect you to pay every month. If you stop payment because you think your bankrupt mortgage company won't care, prepare for the consequences. I posted more about this here.

What happens if you're applying for a mortgage with one of these troubled mortgage companies?

You might not qualify for a mortgage that you could have gotten a month ago. If you started the home buying process, say a month ago, and you haven't locked in a rate that you could afford, chances are good that your options have gotten worse. (Even if you have locked in a rate, the mortgage company might try to get out of the lock if there's any legal wiggle room.) That's because there's less money around for mortgages since the credit crunch started a few weeks ago. The people who get that mortgage money will be the ones willing and financially able to pay a higher rate.

Goldman Sachs(NYSE:GS) volatility Elevated: Fed lowers discount window rate to 5.75% from 6.25%. GS is recently trading at $178.29 in pre-opening trading above its close of $169.85. The Fed lowered discount window rate to 5.75% from 6.25%. GS August 165 straddle was priced at $5.95. August options expire on 8/17. GS September option implied volatility of 57 is above its 26-week average of 32 according to Track Data, suggesting larger price fluctuations.

Bear Stearns(NYSE:BSC) volatility Elevated:BSC is recently at $122.60 above its close of $116.44 close. The Fed lowered discount window rate to 5.75% from 6.25%. BSC August 105 straddle is priced at $5.40. August options expire on 8/17. BSC September option implied volatility of 70 is above its 26-week average of 38 according to Track Data, suggesting larger price movement.

Lehman(NYSE:LEH) volatility Elevated:LEH is recently trading at $58.30 in pre-open trading above its close of $54.75. The Fed lowered discount window rate to 5.75% from 6.25%. LEH August 55 straddle is priced at $3.00. August options expire on 8/17. LEH September option implied volatility of 75 is above its 26-week average of 35 according to Track Data, suggesting larger risk.

Countrywide Financial(NYSE:CFC) volatility Elevated: CFC, a U.S. home mortgage lender, is recently trading at $22.29 in pre-open trading, above its close of $18.95. The Fed lowered discount window rate to 5.75% from 6.25%. CFC over all option implied volatility of 153 is above its 26-week average of 58 according to Track Data, indicating larger price fluctuations.

Volatility Index S&P 500 Options-VIX down 5.01 to25.82; ten-day moving average is 26.16, according to Track Data.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.