wrote in message
...
On Fri, 5 Dec 2008 11:26:55 -0500, "Eisboch"
wrote:

Help me out here.

I hear the economy is frozen. Banks won't lend. No mortgages. Hoarding
their bailout money.

Yet, virtually every commercial break on MSNBC or CNN features at least
one
pitch from a major bank or a mortgage company (Ditech comes to mind, which
is a GMAC subsidiary) offering low interests mortgages, loans and "we
have
money to lend" announcements.

So, why aren't they lending? Seems to me that this would be an ideal
time
for people to re-finance for lower rates, etc.

Economics confuses me.

Eisboch


Basically they are only lending to people who can guarantee to pay
them back these days. That eliminates most of the businesses or
homeowners in upside down mortgages and an unsecure job.
The thing that is missing is people who will loan money for a dream.



Sounds pretty much like how it was back in 1983 which was the last time I
applied for and received a mortgage.

As for businesses, banks have never been a good financing source, other
than for a basic, limited credit line, backed by tangible collateral. In
the case of small business, the collateral often consists of the equity in
the business owner's personal house. I saw people's houses auctioned off
and vowed to my wife that I'd never go there.

The business I had grew to a $20M+/year operation and I never had a bank
loan or line of credit. When I sold it, the buyer's financial people
(large, public company) who were doing the due diligence raised some flags
and temporarily held up the process. They simply didn't believe that we had
no debt.

There are much better ways to finance a dream.

Eisboch