Lending Information 4 You

mhb_valentine asked:


Well, during the current credit crisis, lending on the interbank market nearly came to a halt because Banks did not trust lending to each other.

So can someone use information economics to improve my understanding of what happened?

We’ve seen a possible solution to the problem is having the government provide guarantees for loans in the interbank market. But what are the limits of this approach, again, in the light of information economics?

Kris asked:


I start with smaller loans and then work my way up?

Matthew D asked:


Today the band is playing on the deck of our economy, and credit is deadlocked due to sub prime lending.
Is it true that the liberals are responsible, for playing the race card in getting low income persons loans beyond their means?
Or is that just a canard, and are the conservatives actually responsible for cutting interest rates to keep people spending during a declining labor market?

Damon K asked:


I am a mortgage company and all of a sudden we are being told that we need to be conducting “fair lending analysis” I have no idea where to begin, any recommendations

Andrew asked:


Sub-prime lending resulted in many banks receiving federal aid. To pay for this the government took several loans from itself, weakening the value of the dollar. How does that harm the economy?

Dave asked:


Knowing that there are so many sleezy lenders out there making exorbitant amounts from low-income individuals, it just seems like something that legitimate outfits might negate by offering better loans on this guaranteed income. Does anyone know if any legitimate lending institution has stepped up to offer what the cons have not – a decent loan product based on anticipated tax returns?

Sean asked:


Investor’s Business Daily: “The White House thinks it can jawbone banks into lending to people they don’t want to lend to. We’ve been down this road before, and it led all the way to the 2007 financial meltdown. The president on Monday gave a tongue-lashing to the ‘fat-cat bankers on Wall Street,’ as he called them the day before. He wants them to make more loans to small businesses and consumers to give the economy a boost. We tried this before. Indeed, it’s the very source of the financial and economic calamity of the past two years.”

asked:


In some magazine a few years ago I saw an article about how in China groups of people gather and lend money to a communal fund. Later, all of the money is given to one of the members, and all of the members lend the same amount again to borrow to other partner. they repeat until all of them have received a loan the amount of the original fund. Where do i find information about that?.

jd asked:


With so many people having financial problems right now, such as foreclosures and bankruptcies, what is the lending going to be like? The banks are not going to be able to process any loans due to so many people having bad credit. Am I wrong?

Bob G asked:


Is it possible that the haste in making loans available to everyone even unqualified applicants in order to create the illusion of fair lending practices is the actual cause of the lending failure? Clintons administration forced lenders to lower qualifications for loans to allow more loans to be available for minorities. Could these lower qualifications have been a poison pill in the lending world?