The Sub Prime Market is Drying Up

The sub prime market is drying up. The lenders that are left are saying "no" much more often than they are saying "yes", and their guidelines are getting tighter.

While the independent players in the sub prime space seem to be withering, the "A" lenders that have sub prime affiliates are in a prime position to grab market share. Chase's sub prime group in NJ for example, just hired 25 New Century employees (mostly underwriters and processors). Chase's sub prime business is on the verge of exploding, because along w/ Citi and Homecomings, they are one of the few sub prime shops left. As a result of having actual guidelines, the aforementioned lenders seem to have much lower default rates, and obviously, having the deep pockets of a large money center bank goes along way during this sub prime melt down..