New Century Financial is on the skids reports the New York Times. Not much of a surprise there but two home builders also had some bad news to reveal.

Lennar announced that earnings plummeted by 73 percent in the first quarter, reports Bloomberg. Lennar is the largest home builder by sales. And Beazer Homes stock took a hit early Wednesday on news that the FBI was investigating the home builder for possible mortgage fraud, reports the Associated Press.

The trouble for Lennar signals an industry-wide problem of a market running scared and inventory being discounted and dumped to get it off the books. Lennar has backed off earlier guidance that its earnings would match 2006. It did say, however, that the subprime loan market had barely affected its results. So the prime mortgage home buyer is staying at home as well?

The Feds are investigating, it seems, because Beazer has four times the number of subprime foreclosures and the Charlotte Observer has documented cases of faked income and debt on applications for government-insured loans. The company denied the paper’s claims but says it is cooperating with the FBI.

And then there is the real possibility that New Century will file for bankruptcy protection. The company is trying to find a "pre-packaged" bankruptcy where a buyer takes over rather than simply liquidating the inventory. The banks have already moved in to sell off the houses backing billions of dollars in mortgages. Finding a buyer is getting harder and harder and one lawyer notes, "… it really is late in the game." And especially since many states have shut down New Century’s operations. The end could come as early as Friday.