The Mortgage Bankers Association is reporting a 50% reduction in the number of loan originators from the peak of the sub-prime boom time.

50% reduction!

This is actually a very good thing and is part of the shakeout needed to start to get the industry back on track.

But, 50% is not enough, it is very likely we will see another 10% to 20% on top of that. Some of the estimates show a 80% shakeout but I think it will settle at between 60% and 70% total.

This is a good thing for investors who have prepared for this. Investors who have their alternative sources of funding available are in the catbird seat. Investors who have honed their ethical creative financing techniques are in a very good position too.

It is still a hard road for most short sales but as we have seen with some of the large sub-prime lending houses failing, short sales get a lot easier once the lender is out of the picture and a receiver or trustee is charged with disposing of the non-performing assets. For investors with ready sources of short to medium term cash, the bargains abound in some of the harder hit areas.

The next shakeout is with real estate agents. The weaker ones are already starting to leave and that will accelerate in the coming months.