As a buyer agent, I encourage my clients to go with direct and strong lenders right now. In a presentation of an offer, if my buyer had their pre-qual from a direct lender, I would use that as a strong leverage point in my buyers favor.
Since the end of 2001 interest rates were low, home sales were up and everyone jumped on the bandwagon. Since the bubble has burst in several large key markets and slowed in others everything has been making a correction. Agents are quitting, FSBO"s are down and much harder to sell, Sub-Prime lenders are folding.
People got loans without much qualification, and others who were well qualified got into bad loans (more than they could afford, or with a variable rate). Now the mortgage market is taking the correction for that, people and these lenders are in over their heads.
If you have good to above average credit, you can still get a loan. Banks make money by loaning it! The main thing here is to 1. Shop around, 2. Learn as much as you can about how loans work, 3. Stay with one of the large banks (Wachovia, Chase, Wells Fargo etc.) instead of some small independent lender.
Personally where I am having trouble is explaining this situation to buyers. They don't seem to understand that a loan program that is available today just may not be available tomorrow.