Highlighted stocks include Huntington Bancshares Inc. ( HBAN - Analyst Report ) , MGIC Investment Corporation ( MTG - Analyst Report ) and MBIA Inc. ( MBI - Analyst Report ) .

Even though it appears that financial institutions have moved ahead with respect to the unfreezing of our banking system, they remain reluctant to lend. With financial institutions afraid of the potential of additional losses, their current Anaconda grip on lending only exacerbates the problem.

While we continue to see financial institutions advertise their willingness to lend, the hook remains, "qualified" home buyers. Clearly, the definition of "qualified" has changed dramatically over the past year to mean "pristine credit".

As credit score requirements continue to be ratcheted higher, additional hurdles have been added.

Credit card client "profiling", with respect to their shopping habits, has increased. So by example, you previously shopped at a gourmet grocer and now it’s predominately at a Super Target or Wal-Mart. Even though the change stemmed from being fiscally more responsible in trying times and you continue to pay promptly, potentially you could see your credit card limit cut without notice, which in turn raises your balance-to-credit limit ratio (a bad thing), which negatively impacts a potential mortgage (i.e. NO MORTGAGE FOR YOU!!).

Therefore, it does not really matter how low interest rate levels go if you cannot get credit.

Let us be clear, it is appropriate for financial institutions to ease or contract lending requirements depending on their exposure to risk within various economic environments, given their responsibility to depositors, bondholders, and shareholders. However, when a financial institution partakes in a "government bailout," there is the implied quid pro quo. Unfortunately, financial institutions do not appear to be willing to play by the same rules.

Where does the fault lie? With ourselves for not understanding our personal finances and what we could ultimately afford, as well as our senators and congressional representatives (from both sides) that kept pushing the idea that everyone needs to buy a home.

Despite the President-elect having his incoming team working on a "stimulus plan" proposal now, the benefits may not be visible until the summer. As such, the pressures the financial institutions have experienced over the past year, do not appear to be lessening anytime soon.

Opportunities

While we do not cover the area, the only bright spots could be for the pay-day lenders and pawnbrokers, currently.

Weakness

At this point in time, with no positive catalysts visible we remain more negative on the near-term prospects. In 2008, we covered our Sell recommendations on the shares of Washington Mutual and Ambac Financial ( ) . (Combined, these calls yielded in excess of a 90% return). We continue to retain our Sell recommendation on the shares of Huntington Bancshares Inc. ( HBAN - Analyst Report ) , MGIC Investment Corporation ( MTG - Analyst Report ) and MBIA Inc. ( MBI - Analyst Report ) .