An ugly cloud continued to hover over Southern California's otherwise beautiful, unseasonably warm weather last week. And no, it was not the smog. It was the ugly, frenzied turmoil that's struck the subprime lending industry faster than anyone seemed to expect.

Loan defaults and pulled liquidity lines have mounted at such a speed that market participants are anticipating this subprime "melt-down" will trump that of the late '90s - a time period that now ailing lenders such as New Century Financial Corp., have long considered a badge of honor to have lived through. Up until recently, most had expected the largest lenders to stay intact, leaving smaller, less-well-capitalized shops to consolidate or file Chapter 11. But now, as big name lenders such as New Century and Accredited Home Lenders clamor for funding, many in the industry are left scratching their heads.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.