Is it over yet? Lingering issues from 2006. (2007 Good Expectations).

If Angelo Mozilo said it, it must be true.

The chairman and CEO of Countrywide Financial Corp., among the country's largest mortgage lenders, said some months ago that he expects 2007 to be a "transitional" year for the mortgage industry, and he hasn't backed down from that statement yet.

As of the beginning of the fourth quarter, pre-tax earnings at Countrywide' s mortgage division were down by 20 percent compared to the first nine months of 2005.

But even darker clouds may be on the horizon as a perfect stoma gathers.

Home sales are lagging, adjustable rate mortgages are coming due and regulators are increasingly cracking down on the subprime sector, all suggesting continued weakness for mortgage lenders.

Indeed, as the year came to a close, the Mortgage Bankers Association reported delinquency rates for mortgage loans in the third quarter rose 28 basis points compared to the second quarter and 23 points from the year ago period.

While the economy has remained stronger in the Valley region than in many other parts of the nation, home resale volume has continued to decline.

Countrywide, in a meeting with analysts in the fall, predicted that mortgage loan production in 2007 would slow to $2.3 trillion from an estimated 2.5 trillion in 2006 and down from $3.1 trillion in 2005.

Can you say consolidation?

High Gas Prices

The skyrocketing cost to fill up last summer hurt pretty much everyone, but it was especially rough for small business owners who depend on transportation.

Will 2007 prices level out?

Still Priced Out 

When is a soft landing bad news?

When it means that while home prices probably won't drop dramatically, particularly in many highly coveted Valley neighborhoods, many houses will go unsold, leaving residential real estate brokers and home sellers holding the bag.

In its most recent report, the Southland Regional Association of Realtors said home sales in the San Fernando Valley were down 22.5 percent compared to the year ago period with 219 fewer homes changing hands in the month.

But even as the volume of sales has slowed, there's been relatively little movement in pricing. In many submarkets home prices are still escalating at double-digit speed.

Most believe that buying activity will remain sluggish at least through the first half of 2007 and perhaps for the full year, oddly enough because prices are not coming down commensurate with the dropoff in sales.

The median price of a single family home in the Valley is still close to $600,000, a figure that is sure to keep a large segment of the population out of the home-buying market.

As adjustable rate mortgages come due, some homes will likely come up for sale at somewhat lower rates. Then too, mortgage rates have not risen as dramatically as had been expected last year, moderating the influence of ARM-related sales.

In short, the area's residential real estate market will suffer not from a lack of interest but from a lack of funds.

Auto Sales Slump

The Big 3 seem to have finally realized consumers aren't wild about SUVs. More modest vehicle lines and eco-friendly cars seem to gaining speed. But will it last?

Cemex Mine

The proposed sand and gravel mine by Cemex Inc. in Soledad Canyon has been a divisive political issue in that area.

Since 1999, the city of Santa Clarita has spent nearly $8 million battling the project through lobbying efforts, billboards and mailers.

Times Saga

The L.A. Times: Will it or won't it be sold? Will the Tribune Co. take the company private and hold onto the paper or will a big-wig like David Geffen buy the paper and put it back under local control?

Image Entertainment's Future

After succeeding in re-electing its board of directors despite an opposing slate nominated by Lions Gate Entertainment, the home entertainment producer and distributor keeps open the door to being acquired. Will it finally happen in 2007 or will the Chatsworth company remain independent?

No Option Unturned

At last count, some 20 CEOs fell to it, some awaiting indictment, and more than 100 public companies were under investigation.

The stock option scandal that monopolized financial headlines in 2006 isn't over yet, most pundits say.

Although most firms have either voluntarily initiated investigations and issued restatements or have done so as a result of federal intervention, the government is not prepared to let this dating controversy die.

Officials have said that they intend to bring more prosecutions against corporate America.

Already, corporations have spent small fortunes to correct past practices and a significant portion of earnings have evaporated as they have restated earnings.

The scandal, which stems from a practice whereby companies would backdate stock option grants so that executives were virtually assured of a windfall when they exercised the options, is expected to continue to bring more restatements in 2007 and more expense for corporations large and small.

One report noted that nearly 30 percent of companies that grant stock options to their executives have timing issues.

Another recently released study suggests the problem may extend to board members. That study found that some 1,400 board members may have profited from the manipulation of stock option grant dates over a 10-year period.

Time Warner

The cable giant in 2006 snapped up most of its competitors in the west and became the de facto provider in the Valley. In the process, some have charged the company with being a monopoly and having less-than-stellar service.