A big question is how will thing look when the dust has settled. The article makes a good point. A lender has to be fairly diversified to survive this shakedown. A lender with a sole revenue stream in the BC loan variety will most likely not make it through. Looking ahead then, most likely, the bigger outfits will have a subprime division specializing in particular programs. However, a stand alone subprime lender will be few and far between.
Subprime mortgage crisis may leave few independent players – MarketWatch: “‘It’s unlikely that any of these mono-line subprime lenders will be around on a stand-alone basis in a year,’ Robert Napoli, an analyst at Piper Jaffray, said. ‘Weak players will disappear and the originators that are left will be backed by much stronger players with more capital.’ “