Re: How Bad It It Outthere?

Dana Compton wrote:
On Nov 8, 8:02�am, Bill Kambic <wkam...@xxxxxxx> wrote:
How bad is it out there?

I had lunch yesterday with my banker. �We got to discussing the
economic climate in general, and agricultural lending in particular.
His answer was, "business is dead as a doornail."

In short, anybody who qualifies for a loan doesn't want to borrow. The
people who want to borrow don't quality. �He said credit scores for
any kind of loan have risen significantly.

He has a friend who works for GMAC. �He said they have raised a
qualifying credit score to 700 for purchase of a new vehicle. �He said
this is particularly remarkable in the presence of the HUGE number of
unsold GM vehicles. �While he had no direct information on Ford Credit
or other companies, he wondered if they have done the same.

Lease requirements have also increased significantly.

His organization is at a market disadvantage as they are a "GSE"
(Government Sponsored Entity, in the same general category as Fannie
Mae and Freddy Mac but without the "baggage" of poor management). This
means that they are paying more for money and must either charge a
higher interest rate or reduce their "margin." �Since they are an
agricultural co-operative lender their operating costs are somewhat
less than some other entities, but they are still being squeezed.

He also noted that he has seen, for the first time in his career,
multiple instances of buyer default at closing. �Twice in the past few
weeks buyers have chosen not to close on property after all the work
was done, forfeiting their earnest money and closing costs. �In one
instance a buyer walked away from $7500. �That might not be much on
one of the Coasts, but it's a LOT of money in East TN. �They just
didn't feel like spending the cash they needed to spend to complete
the deal. �He said in speaking to some folks at title insurance
companies he deals with that this phenomenon, while not common, is not
at all unknown.

The current requirements, in his opinion, are a "backlash" against the
extraordinarily low requirements of a couple of years ago. �Then,
local banks were lending 115% of value against bare land on "low/no
documentation" loans. �He was never able to do that (his charter
limits lending to 85% of value and requires normal loan
documentation). �Indeed, he was at a competitive disadvantage, then.
Looking backward, it was probably good that his company could not get
involved with such things. �He said their loan default rate is
significantly below the national average and the member's equity is
not at substantial risk.

He's got money to lend and while it's not as cheap as some other
sources they have long track record of stability and fair dealing.
They also are very competitive on closing costs on loans (they charge
modest flat rates, not "points"). �He hopes that these small things
will help generate some business, but he told me if I wanted to borrow
for our fencing project I could call on Monday and have the money on
Tuesday!!!!!

It was a most informative lunch.

Our son in law was a perfect example. He
drives a cement truck, all he did was complain about the illegals
being here, then they were gone and he had no work because they were
the ones that did all the concrete finish work.


The construction industry was one of the better paying blue collar sectors of the economy until that influx of illegals started undercutting the union outfits..they really did a lot to ruin the lives of average working Americans by taking away good paying jobs with benefits and converting them to underpaid positions with no benefits. This happened in the Masons trade too. My father working a union job and was able to raise 7 kids and keep a roof over our heads. You don't see this happening as much anymore as those good paying jobs have been scuttled by illegal aliens taking positions for much less. This was definitely done by design.. after all free trade is great for our economy right? Never mind that they were counting the jobs that were offshored as an export too..So between the import of a slave wage labor force, and the export of good paying jobs to slave labor camps overseas, our government has conspired to screw us all down to a lowest common denominator in terms of pay scale while those at the top, the corporate elite just keep on getting richer. As for the banks, and the bailout, while they should be loaning that money to move the economy, they are using a lot of it to buy out other small banks and when there is just one bank to look to for financing, we will all be in a huge bloody mess..If you need cash and have less than pristine credit, you can go whistle in the wind..

.

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