Cutting equity lines on credit worthy borrowers
Sunday, April 13, 2008 | 08:19 AM
As the credit crunch metastasizes its way through the financial system, its worth recalling its simple origins: The lending of money to people who could not afford to pay it back. That error was then compounded, by failing to maintain security for loans by traditional metrics, i.e., insufficient loan-to-value (LTV) measures.
The banking sector's solution to this problem? Cancel loans to the most credit worthy borrowers, including those whose loan-to-value exceeds traditional historical requirements.
Such was today's shocker, as examined in Gretchen Morgenson's column in the Sunday Times:more.
No comments:
Post a Comment