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Families face credit card squeeze as banks react to market turmoil

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posted on Sep, 8 2007 @ 05:02 AM
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Families face credit card squeeze as banks react to market turmoil


www.telegraph.co.uk

Families have been warned of a looming credit drought as banks and building societies stop handing out cards and overdrafts to hard-pressed households

Industry experts have said that lenders are clamping down on debt applications for fear that borrowers default as the economy worsens. It is the latest evidence of how the financial markets crisis is affecting households and follows news that mortgage companies are primed to increase their interest rates, causing more hardship for hundreds of thousands of households due to renew their home loans in the coming months.

(visit the link for the full news article)




posted on Sep, 8 2007 @ 05:02 AM
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This, and the news of the US job losses, is signs that sub prime is spreading.

The angelic belief of the Fed saving the day could become a nightmare if they do not cut. Which is still likely.

Even if the fed does cut, the damage is already done if you ask me. Banks have been hit hard and the problems in the lending system between banks are being kept quiet.

Did you know the maximum length of time a bank will lend money to another bank is now a week?

The fallout is being covered up.

www.telegraph.co.uk
(visit the link for the full news article)



posted on Sep, 9 2007 @ 12:35 PM
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The vast majority of the problems in the mortgage industry are due to unscrupulous brokers and loan officers who put people into mortgages that they cannot afford...and borrowers who didn't read what they were signing. Loans were not properly underwritten, people were allowed to deliberately state false income in "Stated Income" or "No-Doc" loans.

Once the defaults started to happen and foreclosure became a reality...these companies had to buy back the loans that they failed to properly underwrite, putting nearly 150 mortgage companies as of this writing out of business.

Greed to get the commission was a big part...but I do have to say that I feel the consumer bears responsibility also. You should know what you are signing and if you can afford the future payments on these adjustable mortgages. Now people complain because credit is being tightened. Please! Give me a break. All lenders are doing now is going back to sound underwriting practices that were ignored and started this whole mess.

By the way, the fed rate cuts that people are waiting on will not necessarily all be passed on to the consumer. The banks and mortgage companies are hurting due to all the defaults...just look at Countrywide as one example. They'll need to pad their profit by keeping much of the fed rate cut (if it happens at all) for themselves.

It amazes me how people who are already in excessive debt are complaining when lenders won't continue to allow them to borrow more money. (Yes, I do work as a Manager for a Mortgage Banker, so I am seeing all this firsthand).




posted on Sep, 9 2007 @ 02:17 PM
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Not to sound unsypathetic, but I have a hard time feeling sorry for any of them.

The mortgage / credit / banking companies in the quest for more money made loans etc to people who should in no way have had access to credit of that magnitude. If you are making $10.00 an hour and have 30K in credit card debit, you should not be buying a house worth $500000 in a speculative market.

The sheeple who run up credit card debt by living beyond thier means (way beyond the means) are to blame as well. It sure is fun to have that new car and the 50" Plasma, eating out all the time, buying things left and right etc etc etc. But the dance goes on only so long and at some time you have to pay the fiddler.

The bottom line; if you cannot afford to pay cash for it (aside from a home) you should not really buy it eh?



posted on Sep, 9 2007 @ 02:21 PM
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tightening up on the credit now is like closing the barn door after all the horses have run out....too little, too late.

there's an interesting little write up on cnn, as to who's the blame...

money.cnn.com...

their opinion is that the fed, specifically former chief Greenspan bears the most responsiblity for this mess...



posted on Sep, 9 2007 @ 02:36 PM
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Well infinite while the regular joe suffers, bankers will not lose their sleep thanks to the Fed transfusions.

I can not wait to see how the holidays spendings goes this year.

I can tell you one think, retailers are doing anything they can to lure consumers to their stores.

If you have cash and do not depend on credit you may find some good deals out there.



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