Getting financing approved for a new home is tough, and specialized bad credit mortgage lenders are in more demand than ever before, yet the there don't seem to be any legitimate programs available for the millions of people in America who dream of owning a home but don't qualify.

I get it... The economy tanked, wallstreet crumbled, jobs were lost for millions, and a lot of good people like me and you had to choose between paying loan bill on time or putting food on the table for our family.

During these rocky times, many were humiliated and kicked out of their house, veritably shutting the door on the American dream of home ownership.

The Subprime Mortgage Lender Crunch

Things are still tough, but if you are one of the lucky few who learned from past financial misteps and have righted your financial situation back to healthy, you must be eager to take advantage of record low real estate prices and buy a home to return to 'home owner' status.

Eager and full of hope you, looking to finance a home you are running into a brick wall trying to find poor credit financing options. Bad credit mortgage lending just ain't what it used to be...

Finding a mortgage brokers willing to work with low scores is almost impossible presently. Sub-prime lending has relatively few underwriters available, and the banks that claim they offer mortgages for bad credit are in actuality only loaning out money to 'less than good credit', but truly bad scores are denied outright.

You may have a good income but the lending markets simply don't have the money or willingness to risk.

Is All Hope Lost?

I wouldn't recommend giving up your search for a home loan, so if you wish to tenaciously continue your pursuit, I would like to provide you some places to start.

First, begin your search with a mortgage broker. The best mortgage brokers will have a stable of lenders they can shop your borrowing stats to try and qualify you for a lending product.

Generally, as a middle man your broker will be paid a fee equal to a certain percentage of the amount financed.

They will do all the leg work for you, presenting your credit details in the hopes of finding a lender that can squeeze out an approval for you. If they can't get you financed, they don't get paid.

It is important to keep in mind that individual mortgage brokers can have different banks they like to work with, so just because one says they cannot get you approved because of your bad scores, keep trying. Some have relationships with private lenders or credit unions with unique approval requirements for the money they are lending.

Prepare ahead of time for qualification review, as you will only save yourself time. Take advantage of the online free credit report offers to get a copy of your history from the three bureaus, bring them with you, and bring reference letters and additionally letters explaining the situation behind any negative records that brought down your scores.

You do not want multiple banks and brokers pulling your scores over and over as it will only lower your scores further if you acquire too many credit inquiries in a short time. At this point in the game we need every leg up we can to get you approved.

Additionally, it would not be a bad thing to bring a budget list that indicates the money you receive monthly and your expenses. The stronger a financial picture you can paint, without stretching the truth, can help tip the scales in favor of approval.

As you can imagine convincing the pontential lender with evidence showing how you can pay the loan payments easily will not hurt.

To improve your chances of qualifying, prepare to pay a larger down payment - more than the usual 3%, 10% or 20%. This is another approval strategy to show the lender your willingness and ability as a borrower to save and pay on your obligation. The increased equity acts as additional security against your financing protecting the bank's investment further. As an added bonus you will reduce your monthly payments - if you can, and it makes sense for you, do it.

Understandably, not everyone has the ability to increase the down payment...

What to do if you still cannot get bad home loan lenders to approve you?

If you try time and again and feel you have exhausted all your options to get a mortgage, then it might be time to try creative mortgage alternative strategies.

We have developed a quick guide to buying a house when you don't qualify that outlines creative mortgage alternatives. Check out our guide on how to buy a house with bad credit to learn more about home buying alternative to traditional financing.

A brief run down of your options would be to pursue owner financing or private lenders. If the seller of a home owns the real estate outright, there is almost no end to the flexibility with which you can structure a purchase contract and agreement.

The idea, of course, is to create a win-win solution that solves the home seller's need to sell and meets your inability to get a traditional financing approved.

The seller becomes the bank effectively providing a private mortgage to you on his or her qualification standards--whatever they may be. In many cases it could be determined by the steady look in your eye and a handshake.

Additionally, a sad result of the economic down turn is there are a number of desperate sellers that cannot meet the payments of their own loans and face foreclosure and eviction. In these cases it is often possible to create what is known as a 'subject-to' home purchase.

Essentially, in lieu of your acquiring your own financing to purchase, you take over in a manner the mortgage of the current home owner. It is an advanced home buying technique for people that a skilled title company can help you structure.

The other option is to wait out the current economic slump and wait until borrowing is easier. If one thing is certain, times, both good and bad are cyclical. With time mortgage lenders pockets will get flush with cash again and they will return to competing desperately for borrowers with both good and bad scores.

If you continue saving while you wait for their return, you will be more than capable of qualifying for whatever the more flexible low credit lender requirements may be.

Which Mortgage Lenders Loan to Bad Credit

The following is a review of mortgage lenders most likely to offer easing lending options based on what we know today.

Citigroup Mortgages

One of the well-known mortgage lenders is the American-based company Citigroup. This is the first company a borrower with a bad credit history will likely try. They provide adjustable and fixed rates. For a 15-year mortgage, they offer the lowest interest rates. Citigroup is found in 54 countries outside of America.

In the current climate people are using adjustable rate mortgages especially those who are looking to reduce their monthly payments on debt service. After they get back on their feet, the idea is to switch to a fixed rate to lock in historically low rates. Quite frankly, with the tumultous financial health of America and the international community, I do not recommned any adjustable rate mortgages presently. The risk of sky rocketing interest is just too great in these unstable times.

Bank of America

Bank of America usually offers a number of subprime mortgages. They have had a spotty record of helping clients facing financial difficulties and have earned a reputation as a tough lender. Bank of America is the third largest bank in America at the time of this writing. I'd recommend trying lending tree or applying for a gmac mortgage first, unless you have a history with BofA.

Wells Fargo

Another national lender is Wells Fargo. They have existed since the stage coach days and they have over 1000 branches in America. For home loans, Wells Fargo offers a number of online products that have empowered borrowers. They have a good record of embracing technology to stay with the times and provide you additional benefits to consumers.

They also provide subprime home lending options. In the past they have offered mortgages which allow borrowers to purchase a house and to make home improvements at the same time if they want to undergo renovation simultaneous with their purchase. Qualification standards can vary.

Other lenders include Allied Home Mortgage Capital Corporation, Countrywide Home Loans, Inc., First Magnus Financial Corporation, GMAC Mortgage LLC, Primary Residential Mortgage, Inc., Bank of America Na Charlotte, Ark-la-tex Financial Services LLC, Premiere Mortgage Funding, Inc., First Horizon Home Loan Corporation and American Home Mortgage Corporation, each with their own benefits and negatives.

Additionally, your local credit unions should not be left out when comparing lending options.

For further information check out our guide on how to get a mortgage approved.

Undoubtedly, if you do qualify you must expect any mortgage approvals to have a higher interest rate and service fees. They will also impose additional charges for late payments.

When Bad Credit Mortgage Lenders Returns

Options may be scarce today, but the time will come when they will return, and we will be sure to update our site with the financing offers once they become available.