Just to give you a little background about me.  I have been a mortgage broker for over 10 years, and I have another 7 years in the finance industry.  So I feel I have a good understanding of the market.  As for Greenville, well that is another question.  I grew up in Greenville, and have decided to stay.  The nice thing about Greenville, and the upstate of South Carolina, is that there are 4 distinct seasons.  You are 3 1/2 hours to the beach, and only 1 hours to the mountains.  Greenville is an up and coming city, but it is only 2 hours from Atlanta, and only 1 1/2 hours from Charlotte. 

The secondary market is in a heap of trouble, and the question is can it make a comeback.  It is funny, but I have predicted what is going on now over 3 years ago.  What I said back then was that mortgage brokers will not want to do the loans for the sub-prime market.  Thus places like Household Finance and American General will be able to charge around 18% to 20% or more, and there will be little places one with poor credit can go.  The reason being is that South Carolina (SC) passed legislation that has made it difficult for a broker to get paid what one is really worth.  Another words, It is much easier to do 3 or 4 conventional loans to every 1 sub-prime loan.  You see SC has said that a mortgage broker can not charge more than 5% or 5 points on the for the loan.  Thus if you have a loan that is worth $100,000, the most you can charge is only $5000.  On the surface that does not sound bad, but when you have to subtract out the lender's fee (typically $650) and the processing fee (typically $300 to $400).  That may leave you making $4000, on the front end of the loan.   Thus the new legislation was a pain, but not the end of the world. 

Now the bubble is starting to break for many Sub-prime lenders, and for that matter there are some conventional lenders like Countrywide that are have some serious problems.  This is causing the rates on the Sub-prime market to substantially climb.  Thus making many of the Sub-prime loans, that many mortgage brokers are processing a high interest loan, or a Section 32 Loan.   Because of this section 32 loan, the mortgage broker again will have to cut his fee.  In time no mortgage broker around will have any desire to do sub-prime loans.  Thus creating a vacuum for places like Household Finance and American General to fill the needs.

Greenville will survive this because of the growth and potential that is around the area.  Mortgage Brokers will do more and more Conventional type loans, and will pull away from the Sub-prime loans.