Subprime mortgage REITs are establishing new lows. NEW is traded at 81% of BV, LEND - at 86%. The reasons are obvious: that BV consists of subprime loans, which could default if housing prices get lower. If that happens, then there companies are obviously headed to Ch 11, which is how the market currently values their prospects.
There is only one flaw in this analysis. Housing prices are not going down. They are going up.