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Confessions of a Banker
I just got off the phone with a friend of mine (yes, I do have friends). He was calling to clear up some things that he heard on the radio. I’m going to attempt to layout his questions and then answer them:
Tim: Hey Tom, is it true that banks have stopped lending money to anyone?
Tom: Nope, that’s not true. Have restrictions tightened on all sorts of lending? Yes it has. Is it harder to get a mortgage than it was 6 months ago? Yes it is. Is it harder to get a car loan than it was 6 months ago? Yes. Can well qualified borrowers still get it done? Yep. What about business lending? That has been restricted more than lending to individuals has.
Tim: So, when the “talking heads” tell us that credit has totally frozen up, they are exaggerating things?
Tom: Yep.
Tim: Doesn’t it strike you that the way guidelines are now is the way they should have been to avoid a LOT of these problems?
Tom: Yep.
Tim: So, what was your opinion of the bailout?
Tom: The banking system has become bloated and full of too many people pursuing unreasonable returns. If Washington Mutual and Wachovia could be “shut down and taken over” by a joint private money (JP Morgan and Citibank) and FDIC and it could go very smoothly, don’t you think we already have the mechanisms in place to handle the crisis? Let’s face it, not only are there too many homes out there (part of the problem) but there are also too many bankers. Until we adjust both of those down to sustainable levels, we’re going to continue to have problems. The quicker we adjust those, the more quickly we can begin rebuilding.
As a friend of mine, Jeff Brown, a Realtor in SanDiego, says, “Lenders Lend.” That’s what we do. Are the rules changing? Yep, but we’re still here, the doors are still open and the RIGHT kind of loans are still getting done.
So, there’s my confession, the world isn’t coming to an end and I’m still writing loans.
Oh, one other thought - I think it’s actually a really cool thing that the people in Congress actually listened to their constitutents! What a wonderful example of democracy in action. But don’t think the issue is totally dead yet, so call them again!
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