It was obvious for those who think that subprime mortgage problems are not really different from problems in all other mortgage sectors. The difference is only with exposure of some corporations that made them explode. However, many mainstream “analysts” spelled the “no-spillover” mantra on TV and mainstream press.

Today I’m coming with the proof that there is a spillover, as I expected.

The HomeBanc corp warned yesterday:

“Although our previously disclosed restructuring activities are on track to meet our projected results, the impact of the sub-prime mortgage market meltdown has overflowed into the prime mortgage market. In particular, gain on sale margins during the quarter were significantly lower than forecasted, and we are revising our guidance.”

The stock is down 11% on the news. Spillover all over, and over again