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Tight lending puts some otherwise viable small businesses out of business.
Congress's Joint Economic Committee reported last week that small businesses continue to face tight lending standards.
Businesses are not investing because they don't have customers; and the housing market is hamstrung by tight lending standards.
But the industry has to overcome significant challenges, like high unemployment, rising foreclosures and tight lending standards.
Prices have been flat over the past year, and tight lending restrictions continue to suppress the market, he said.
The result would be a long period of tight lending and of subpar economic growth, if not outright contraction.
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Ed Stansfield, chief property economist at Capital Economics, said: "The latest mortgage lending snapshot from the BBA suggests that growing pressure on household finances, rising fears about job security and still-tight lending criteria are depressing activity in the housing market.
With tighter lending regulations, Toronto-Dominion and other Canadian banks escaped the worst of the mess.
And tighter lending standards mean that many buyers will need more of it.
But high house prices and tighter lending standards may have brought that process to a halt.
Builders have been facing tighter lending standards as they try to get financing for new projects.
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