Subprime's biggest losers

NEW YORK (CNNMoney.com) -- Little has troubled Wall Street more recently than subprime mortgage worries, with financial, mortgage lender and homebuilder stocks among the hardest hit.

So far this year, shares of mortgage lenders like Countrywide Financial (Charts, Fortune 500) and IndyMac Bancorp Inc. (Charts) have tumbled, losing up to half their value amid rising delinquencies and signs that even high-quality borrowers are falling behind.

Other firms have folded, like American Home Mortgage which closed its doors and cut nearly 7,000 jobs last Friday after lenders cut its credit off.

"With the lesser players, the jury is still out," said John Stewart, senior equity analyst at Schaeffer's Investment Research.

Real estate investment trusts have also suffered. Small and mid-sized companies like Luminent Mtg Cap Inc. (Charts) and Novastar Financial Inc. (Charts), whose shares have plummeted 79 percent and 91 percent respectively year to date, face a grim future, said Donald Selkin, director of equity research at Joseph Stevens.

"The smaller ones...I'm not so optimistic," he said.

Problems with subprime loans, which are made to borrowers with weak credit, began surfacing in late February before picking up steam in the spring.

Those woes soon surfaced in other sectors and fanned fears that tighter credit conditions would slow both the stock market and economic growth.

Financials have been the most recent sector to feel the subprime pinch, including Wall Street banks such as Bear Stearns (Charts, Fortune 500). Since the collapse of its two hedge funds invested in securities backed by subprime mortgages in June, its shares have tumbled 25 percent.

Equity strategists like Stewart believe that the uncertainty which has toppled markets recently, is priced into stocks of other large financials who appear to be not directly impacted by the subprime mess.

"Some of the biggest players like Citigroup (Charts, Fortune 500), Merrill Lynch (Charts, Fortune 500) and JP Morgan Chase (Charts, Fortune 500) and companies like those, maybe we're seeing a climax in pessimism since fear is so widespread," he said.

While homebuilders staged a rally earlier this week, major players in the sector have also been hard hit this year.

Lennar's (Charts, Fortune 500) and Pulte Homes' (Charts, Fortune 500) shares are both more than 30 percent lower for the year. Shares of the Atlanta-based Beazer Homes USA (Charts, Fortune 500) are down 64 percent.

"I think we've seen the worst on those," said Selkin. "But they're not not going to turn and zoom to the upside."