As a commenter said, “Money is cheap but not easy.”
I played handball last night at the downtown Phoenix YMCA. One of my partners who works in the auto industry told the story of a guy who wanted to put $5,000 down on a $30,000 car but GMAC, the General Motors lending arm, nixed it! He said he verified the story with the comptroller of the dealership.
It sure looks like lenders are being too conservative. It’s a classic swing of banks going from being crazy-liberal to being crazy-conservative.
If lenders are only going to lend on sure things, it sure seems like this would be a good time to start a bank.
{ 3 comments… read them below or add one }
Shift 01.06.09 at 11:27 am
GMAC just reduced their standards. They went from requiring 700 credit score in October to 621 now. They did this a few days ago.
Drew 01.07.09 at 11:56 am
I work for a local financial institution and it is a common misconception that a lender will approve an application based on the equity alone. I am sorry but if an indivdual’s credit score is well below satisfactory and their track record/credit bureau shows that they will more than likely default on the loan, a lending institution would rather play it safe and decline the loan rather than have the headache, and cost, of repossesing a vehicle or any piece of collateral for that matter.
Conservative maybe… but many institutions that abided by ethical lending practices and policies, such as the aforementioned situation, find themselves in much better positions than those that did not.
castle hills homes for sale lewisville texas 01.08.09 at 2:38 pm
This is killing our industry right now.