New Crisis Threatens Healthy Banks: Late Payments Hurt Smaller Lenders That Dodged Subprime Mess

[DeepModem Mom]

Source: Washington Post, Page One

By David Cho
Washington Post Staff Writer
Sunday, June 22, 2008; A01

Increasing struggles by consumers and businesses to make payments on a variety of loans, not just mortgages, are setting off a new wave of trouble in the financial sector that is battering even institutions that had steered clear of the subprime-home-loan debacle.

Late payments on home-equity loans are at a record high, according to fresh data from the Federal Deposit Insurance Corp. The delinquency rates on loans for cars, small businesses and construction are spiking to levels not seen in a decade or more.

Unlike last year, when soaring mortgage defaults sparked a crisis of confidence in the financial system, the root of these problems is the downturn in the broader economy. Simply put, consumers and businesses are strapped for cash with job losses growing and retail sales falling, economists said....

The institutions most at risk in this new phase of the credit crisis are regional and local banks, many of which stayed away from subprime mortgages. These firms are key drivers of economic activity in communities across the country. Without them, consumers would lose a source of personal loans. Small businesses would struggle to stay afloat. Construction companies often can't finance local projects without these banks.

Because they have fewer options than big Wall Street firms for raising emergency funds, these regional and local banks tend to be more vulnerable in a crisis....



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/21/AR2008062101566.html?nav=hcmodule

[AndyTiedye]

1. And the Banks Keep Shortening the Time You Have to Pay the Bill

Used to be you had 30 days to pay a bill before it was considered late.
Now it's more like 2 weeks.

[doodadem]

2. We've talked to Wells Fargo several times lately

My husband lost his job a couple weeks ago, on top of some huge problems we already had going.

All that crap you've heard about sitting down with your banker and working things out when you're having problems? It's just that--a bunch of crap. They could care less. Wells Fargo said that with all the other banks having problems, their business is going just swimmingly, thank you. Lot of first time home buyers out there cashing in on other people's problems, and Wells Fargo is just tickled to help them.

Heartless Simon LeGreedy Bastards!

[apnu]

3. I learned my lesson already

I'm up to my ears in debt and paying it off, slowly. But the lession I've learned is, don't give them your money unless you have to! Pay off and cancel your cards, use that extra cash to pay down your car (if you have one) or sell your car and downgrade to a cheaper utility car, then pay that sucker off ASAP.

For homes, it is a lot more tricky, but then I'm very thankful I rent right now. And I'll continue to rent for the foreseeable future.

Banks don't care about you me or anybody else. Banks only care about banks, hell banks don't even care about their employees, but then few business, other than small businesses, give a crap about employees. That's just the business culture we live in now. As for myself, I only work at small businesses. I would never consider working for a giant corporation.