The subprime mortgage industry is stumbling under a heavy burden of defaults, watching profits dwindle as lenders are forced to buy back loans that have turned sour. This bottom-line reality is forcing many lenders to tighten their lending requirements. Wells Fargo, the biggest originator of subprime loans, according to National Mortgage News, announced this week that they would be cutting 320 jobs in their subprime mortgage division because of tighter lending standards.

The tightened lending standards, coupled with stagnant home price appreciation, leaves many homeowners in default unable to refinance their way out of foreclosure. It’s a downward spiral that threatens to suck down the entire housing market.

But there are people who can help. People who can relieve lenders of their defaulted loans and help distressed homeowners find a way out of foreclosure. Those people are of course real estate investors or homebuyers who have been looking for an opportune time to enter the market. And there’s something in it for the investors and buyers also. They buy low with the knowledge they can rent in the short term and sell high when the market recovers.

Many investors and buyers are eyeing the market, not sure if now is the right time to enter. After all, it could get worse. But timing the market like this can be dangerous. And it's good to remember that there is always a delay in reporting market conditions. The subprime meltdown being reported now is mostly due to defaults that occurred in the first two-thirds of 2006. Even if they don’t plan to buy immediately, investors and buyers who are serious about finding good deals should start looking now so they're prepared to act quickly.