By Michael Boshnack
We have all heard about the federal reserve lending money to banks so they could lend more out to the general public. This has not happened to the extent that the government had hoped for because banks are being extremely cautious about who they give their capital to. We have also all heard stories about people with great credit, who are will to put down a sufficient down payment on a new house, yet they still cannot get a loan. What about the people with bad credit? It seems if the people with good credit cannot get loans there is no hope for the less qualified because many blame these loans for the reason we are in this crisis in the first place.
Banks have not only put a stop on loans to people who fall into this category, but in fact HSBC is closing its subprime lending division. We keep hearing that banks need to lend to help stimulate the economy, and people need to spend as well. Everybody wants other people to do the spending, yet no bank or individual is willing to take on the risk of doing what others have not.
To read more about bank lending click on any of these links
HSBC Sees no Chance of Rebound in Consumer Finance
HSBC to Scale back consumer finance arm
Rebuilding the economy
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