Shares of Friedman Billings and Ramsey (NYSE:FBR) have been torpedoed this week. Since Monday, the stock has lost over 22% of its value. So far, there has been no news from the company that would explain this sinking share price. Here at Hotstocked, we have our suspicions as to why it is not afloat.

FBR shares had been on a sharp downtrend for 2 years. Since peaking in the summer of 2006 near 12, the shares have lost over 80% of their value to their current price of $2.17.

One of the main reasons for the decline is their exposure to the mortgage business. Other reasons could include the evaporation of tangible net worth that the company has been suffering. And according to their recent earnings, they still have not been able to plug all of the leaks.



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Earlier this week Fannie Mae (NYSE:FNM) announced an eyepopping $2 billion dollar loss. Although this loss was greeted with a positive reaction in FNM shares, it sent a signal to Wall Street that the problems with US real estate are not yet over, and things may still get worse before they get better (as inferred by U.S. Treasury Secretary Henry Paulson's recent comments to The Wall Street Journal.)

Shares of other NYSE listed mortgage companies such as Thornburg Mortgage (NYSE:TMA) and Countrywide Financial (NYSE:CFC) also saw similar declines in their share prices since Monday's opening bell.

Resources:

Read the Transcript of Friedman Billings and Ramsey Conference call on SEC website

Discuss if Thornburg will Survive or be crushed in this Message Board

Post your opinion on Eric Billings' $4.2 Million dollar compensation for 2007.