Another subprime mortgage company has gone bankrupt. ResMae Mortgage Corporation is about to be auctioned and it is going for pennies on the dollar. The opening bid, by Credit Suisse Group, is $19.1 million, less than half the size of an offer received by ResMae when it filed for bankruptcy protection on Feb. 13. Since December last year, over 24 subprime mortgage companies have closed. More are likely to follow as the people shoehorned into inappropriate housing loans start to run into payment difficulties.

ResMae’s problems follows hard on the liquidity problems suffered by Mortgage Lenders Network USA Inc. This subprime lender shut down most of its operations in December. It had been offering cheap loans to poor credit borrowers. However, it ran out of cash and was forced to meet collateral calls by its banks. The company has just filed for bankruptcy..

On Wednesday, shares of Kansas City based Novastar Financial Inc. tanked more than 42 percent to $10.10 per share. The subprime lender announced fourth quarter losses of $14.4 million. Company officials set aside $45 million in anticipation of defaulting mortgages and said they were "unsure Novastar would turn a profit in the next five years".

The growing problems of subprime lenders is hardly surprising. According to New York-based Bear Stearns, the level of delinquencies is rising fast, and has reached an all time high for loans contracted within the last 12 months. Bad lending practices helped fuel the housing bubble and now the party is over.

So what are we going to call this growing financial catastrophe? Better call it something sweet, so that we don’t spook investors. Why not call it an “industry consolidation”. There were too many subprime lenders anyway. Yes, that’s right, isn’t it. These recent closures and bankruptcies are bringing us to a better place. Soon we will be left with bigger, healthier subprime lenders who will know better than to issue toxic mortgages to people who can not afford them.

Nah, let’s forget “industry consolidation”, financial catastrophe sounds a lot more accurate.