Oct 12
More thoughts on bad loans
Further my last piece on the whole selling mortgages to people who shouldn’t have them; I was part of discussion with my wife and mother about the mess. The Wall Street Journal had an interesting piece, complete with graphic showing the highest concentrations of bad loans, in the last few days on where exactly these bad loans are centred.
It should shock no one to learn that the major concentrations of the worst loans are located in the property nutty Southern Florida and in Southern California. I happen to know that the former is in a nutty situation where developers are building news property even though there is a recognised glut in the property market. Many of the bad loans have been given to people trying to speculate in a market that they can’t afford. A lot of these bad loans are in a situation where the value of the mortgage is higher than the value of the property.
Lending is going to get tighter all over the US; as lenders tighten their belts and hope for the best. However there will still be companies who use direct mail and other direct marketing to find customers for their loans. These companies should be wary of using this method for their business acquisition. Instead they should use existing software to make sure that rather than using a shotgun blast approach they target those who truly afford it. It will be better for these companies and their existing customers in the long run .
We all hope that advent of revelations of bad loans in certain locales, unsurprisingly the Dakotas are almost bereft of bad loans, that all the honest people trying to borrow money to move house aren’t affected. Loan companies need to clean their act up to protect their bottom line and prevent more regulation from government. We all know what a mess that makes of things. Those government bailouts come with strings attached more likely than not.
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[...] A fellow blogger wrote a fantastic post today on “More thoughts on bad loans”Here’s ONLY a quick extractThe Wall Street Journal had an interesting piece, complete with graphic showing the highest concentrations of bad loans, in the last few days on where exactly these bad loans are centred. It should shock no one to learn that the major … [...]
[...] unknown wrote an interesting post today on More thoughts on bad loansHere’s a quick excerptHowever there will still be companies who use direct mail and other direct marketing to find customers for their loans. These companies should be wary of using this method for their business acquisition. Instead they should use existing … [...]