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How could securities based on lending money to bad risks be good business?
That model was based on lending to people who had jobs and equity in their homes, even if their credit records had blemishes, and then aggressively monitoring the loans to seek repayment.
For the banks' managers, on the other hand, a far-flung financial empire doubtless seemed much more fun to run than one based on lending against next year's harvest.
The woman would qualify to receive $439,000 from the bank for that new home, based on lending guidelines, according to Cheryl Chapin MacNally, the national reverse mortgage sales manager for Wells Fargo Home Mortgage.
He has recently compared the for-profit college sector to the subprime mortgage banking industry -- arguing that both grew rapidly based on lending to low-income people with little ability to repay the loans.
Based on lending data from 2005 through 2007, the suit says, the Office of the Comptroller of the Currency determined that New Century was responsible for the greatest share of loans in foreclosure in the 10 metropolitan areas blighted by the highest foreclosure rates.
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First, he called for a new relationship between finance and the real economy, based on banks lending to business and not seeing success simply measured by short-term profits made and taxes paid.
In contrast, Starling's revenue mode is based solely on lending customer deposits in the form of a transparent overdraft, and, in some instances, a revenue share or kickback from the companies it is partnering with for the Starling Marketplace.
Letters are welcome via e-mail to [email protected] bankingSIR – Your briefing on the LIBOR scandal ("The rotten heart of finance", July 7th) concluded that inter-bank lending rates should be based on actual lending data and a system should be put in place that explicitly promotes truthfulness by those making the estimates.
Some, such as Nationwide and Halifax, are based on their lending figures.
There are two main conclusions: First, when bubbles are not based on bank lending, the mop-up-after strategy still looks pretty good.
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