So, HSBC (NYSE:HBC) has to fess up to unpredictable big spending on loans gone bad, then New Century Financial (NYSE:NEW) drops nearly 30% on a bit of a warning about loan production, as well as word of a do-over on 2006 results.

Will we see the same from peers like Countrywide Financial (NYSE:CFC), or from any of the lenders out there who most certainly, I'm sure, do not engage in that type of lending popularly known as "liar loans"? Does it even matter? Stocks like Novastar Financial (NYSE:NFI) and Accredited Home Lenders (NASDAQ:LEND) have already been whacked with the mugly stick.

The real scandal: No one told any of us this might happen.


Oh wait, legions of people did tell us. It's just that folks wearing rose-tinted lenses somehow end up hard of hearing as well.

My only regret here: forgetting to re-up my NEW and LEND shorts in Motley Fool CAPS, our community-based investment service.

Comments? Bring them here.

At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.