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And while banks may lose money on bonds, they should make a lot more from fewer loan defaults in a weak economy.
Loan officers working at banks can sometimes offer other lenders' products, but they typically give borrowers fewer loan options than brokers.
Before such details can be worked out, though, borrowers with subprime credit could find fewer loan options, as brokers avoid potential liability.
Lenders are scrutinizing applications more closely, and because of industrywide layoffs, many banks now have fewer loan processors to help vet applicants.
Were that to happen, banks would face more, rather than fewer, loan losses and in some instances might even be forced to pass the hat again to shareholders for more capital.
The company has also introduced new interim lending criteria, which means it will be accepting far fewer loan applications and some existing customers will be barred from reapplying for loans for 30 days.
Similar(48)
Fewer assets means fewer loans.
Would you make fewer loans?
It is originating fewer loans than before.
JPMorgan Chase said last year that weaker protection would lead to fewer loans and higher-cost mortgages.
Because banks held on to fewer loans, they relaxed their guard.
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