Death of the Sub Prime Mortgage Market

If you have been staying on top of the mortgage industry, there is a phenomenon occurring that might make Americans uneasy. The death of the sub prime mortgage market seems to have seen its beginning.

Sub prime lenders are the banks that serve borrowers with low credit scores, people with previous bankruptcy, foreclosure, other repossessions and judgments. They are the banks that offer many of the highly popular no down payment or 100% loans.

In the last few months, I have seen 4 very large productive and strong sub prime banks go out of business. It was shocking to see banks that I have used many times as a mortgage broker; banks that I know provide very good service to much of the mortgage industry closing their doors. It made me take notice and others are talking as well.

What is to happen if this phenomenon continues and these types of banks disappear completely? Only borrowers with good credit scores and a sizable down payment will be able to purchase homes. What does that mean for the rest of the country? Will hoards of people be shut out of home ownership and be chained to apartment living when its time to start their families?

One good way to combat the down payment issue is with down payment assistance. Companies like the Nehemiah Program and Ameridream will soon be utilized by many to get the down payment funding that will soon be necessary to purchase a new home, but what of the people with poor credit?

It is now more important than ever to be conscious of our credit and make sure that our credit file stays clean and scores improve or remain high, in the 650-680 range or higher. Now even more so, especially at a time where it takes two incomes to afford a home. It seems that the mistakes previously made by most Americans will have more dire consequences than ever before. Banks are becoming less and less lenient and it's time to tighten the belt, gain control of our spending, debt and credit and plan for our financial future. Your home may depend on it.

Trisha Dingillo is a licensed Illinois mortgage broker and hopes to help people have a chance in the future to easily purchase their homes through her informative website for Bad Credit Repair