The tightening of underwriting requirements has not been limited to the subprime sector. The requirements in the so-called Alt-A sector, which is an intermediate classification between prime and subprime, are also being tightened. And so are the requirements for "prime."

Some loans that would have been prime last year will go Alt-A this year. Some loans that would have been Alt-A last year will be subprime this year. And some loans that would have been subprime last year will be rejected this year.

Some brokers who have been in the market for many years remarked that the underwriting rules now emerging are much like those of a decade earlier, before they were swept away by the euphoria created by steadily rising real estate prices. The emerging new rules, which are not based on the inevitability of rising prices, are a badly needed corrective.