Mortgage-related troubles continue to haunt regional banks. The melt down of the housing market has created a self-reinforcing spiral where lower prices lead to more defaults and unsold inventory, which in turn causes prices to slide further and depress demand because investors shy away from such devaluing assets.

Paul Miller, a Friedman, Billings, Ramsey & Co analyst, cut his price target for IndyMac to zero per share from $1.00. Based on Miller's update, and the fact that Fitch ratings cut Indymac Bankcorp from CC to B and IndyMac Bank FSB from CCC to B, the stock just crashed 43.66% and went from $0.71 to $0.40. Not much to go before IndyMac hits bottom - literally.

As Indymac's share price crossed into sub-dollar area (81 cents as of now), warnings are starting to emit out of Wall Street and Washington.