There is a lot of buzz about the sub-prime lenders that are going bankrupt. Those that aren't bankrupt are tightening their reigns on exactly who they'll give mortgages too. Rightfully so.

There were a lot of couples and families that were borrowing 106% to purchase their home because they didn't have the down payment for the home and the out of pocket closing costs.  In an area where cost of living is high,this is not unusual. Certain neighborhoods, like Levittown, which still remain affordable attract a lot of buyers that need to finance 106%.

With subprime lenders slowly dwindling what will this  mean for the potential buyer?  They simply won't be able to buy or will they?

It's no secret that inventory levels are high. There are buyers out there and homes are moving, but with the sub prime market slowing down as lenders dissappear and tighten their reign, so will the numbers of buyers that are ready to purchase a home.  So how can we counter this?  It's simple. Homeowners could offer a sellers concession of 3 -5% to help pay for the young couples closings costs. They will still have to finance 100%, but they will get 5% off the price to contribute to their at the table closing costs.

This is great for both sides of the transaction.  Homeowners can stick to their asking price, as long as it's within reason, and attract a lot more buyers to their home with this offer. The home will get sold. The Buyer, who otherwise wouldn't be able to close because of  lack of funds, can now move into their new home. Buyers and Sellers can both walk away feeling like they both made out on the deal.