There are very profound fears that our credit markets are crumbling, and that life as we have known it may be in for serious change.

Now, as never before, we as real estate professionals need to help create solutions for our clients and bring sense to the market wherever and whenever we can.  We need to know not only available mortgage programs (and savvy mortgage pros), but also become familiar with creative financing and alternative ways of selling real estate.

One thing lenders could do immediately is to allow existing loans to become assumable.

Many agents are unfamiliar with assumable loans, and might wonder how they work.

Let's use a simple example: Home Seller has an outstanding mortgage balance of $150,000 and is willing to accept a $195,000 sales price. Home Buyer pays $45,000 plus closing fees and assumes the existing financing. Seller exits the transaction with that amount, less closing costs. Future mortgage payments are now made by Home Buyer to the loan servicer.

In some cases, lenders (and sometimes the Seller) might offer secondary financing to help with the difference between asking and sales price--as long as the buyers had a cash stake in the deal. This could be done via a simple second, an all-inclusive trust deed or wrap-around mortgage.

I can't help but wonder why mortgage lenders don't revive the assumable loan, help kick start the real estate market, and save at least a portion of their own and investors' portfolios in the process? Their investors would surely rather have their loans paid off by another borrower, rather than suffer near-certain loss in a foreclosure sale.

In many cases, sellers have no equity. Why not allow them to offer their mortgage debt (or renegotiated debt) as assumable financing for potential buyers? Lenders might be relieved to have mortgage payments brought current--and might even require the new buyer to deposit two or three month's payments with them as insurance against future default.

By allowing assumable financing, lenders would fare much better vis-à-vis short sales and foreclosures--and more homeowners would be able to save their credit and exit their homes with dignity. Most lenders now force homeowners to be in default with their mortgage before they will even consider a short sale or modification of terms.

It just makes sense to get the mortgage debt seamlessly transferred before it ever goes default.

And with the strangled liquidity in financial markets, it makes more sense than ever to transfer debt rather than forcing buyers to secure new financing--which may or may not be available.