Last month, Toll Brothers announced that it signed a deal for a $500 million stand-by mortgage fund commitment from Citizens Bank, which is owned by The Royal Bank of Scotland. So far the company hasn't had to tap into that supply for jumbo loans though. Instead, its traditional investors have stepped up.

Still Don Salmon, president and CEO of TBI Mortgage, the company's lending arm, said at the 2007 Credit Suisse Home Builder Conference, which runs through Sept. 18 at the firm's Madison Ave. headquarters in New York, that he's glad Citizens made the financial commitment. "It's nice to have that in our back pocket," he said.

In fact, the deal has been extended from December 31, 2007 to March 31, 2008. But that's just one way Toll and other large builders are dealing with problems in the subprime market. Toll also wants to go beyond the traditional Wall Street sources to find investors in its mortgages. It would like to get pension funds and insurance companies interested in its loans, which it sells individually.

Salmon thinks he's has a great selling point: There's little risk with Toll's customers. They're well-off purchasers with FICO scores of 730 and 740. "That's a premium buyer," he said.

Salmon said the two top investors in TPI's loans bought 80% of the company's volume. Only one of those loans is in foreclosure.

Dan Klinger, president, president of K Hovnanian American Mortgage, also spoke at the Credit Suisse conference about his firm's reaction to the subprime crisis. He says, generally, his buyers are solid as well, with an average FICO score of 721 and a loan-to-value-ratio of 78%. But Hovnanian also builds for a large group of entry level buyers. With the recent troubles with subprime mortgages, it's much harder for these people to buy homes.

Although Klinger maintains that K Hovnanian American Mortgage is sticking to its underwriting standards, he says the company is trying new tactics, like waiving closing costs, to get buyers into its parent company's homes. "We'll nurse them back to health over three or four months," Klinger says.