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WEDNESDAY, NOVEMBER 25, 2009
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 ANALYSIS 
1

Credit Relief Flows Slowly—When It Flows at All

Consumer aid package won't budge pickier banks

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(Newser) – With hundreds of billions of dollars pumping into the calcified credit markets, many struggling Americans are expecting to see some relief, but many will be disappointed, the New York Times reports. Banks continue to stiffen loan eligibility requirements even as strapped consumers face deteriorating credit scores, and whole categories of applicants for mortgages and car or student loans simply won't qualify.

"There are fundamental elements of qualifications for loans that will inhibit the ability of this program to have any meaningful, significant impact," says LendingTree's chief economist. Even as plummeting home values are eroding refi prospects, the federal relief funds—intended partly to aid investors who buy and trade packaged loans—could take months to reach the credit card and small business loan markets.

Don't hold your breath waiting for the interest rates on your credit cards to drop, even if the issuer is benefiting from a government bailout.
Don't hold your breath waiting for the interest rates on your credit cards to drop, even if the issuer is benefiting from a government bailout.   (AP Photo/Paul Sakuma, file)
Estela Jimenez and other supporters of ACORN (Association of Community Organizations for Reform Now) protest outside a home under foreclosure in South San Francisco, Tuesday, Nov. 25, 2008.
Estela Jimenez and other supporters of ACORN (Association of Community Organizations for Reform Now) protest outside a home under foreclosure in South San Francisco, Tuesday, Nov. 25, 2008.   (AP Photo/Paul Sakuma)
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It's not going to be like flipping a light switch. But the system is under a lot of stress, and anything that can lubricate the markets is a good thing. - Joe Belew, president of the Consumer Bankers Association

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iamthereama
Nov 27, 08 11:38 PM CST
As a new graduate, I'm disheartened to see that less money will be available for education. Often, students can survive on federal financial aid but for those of us who choose to pursue a graduate degree the ability to borrow on the private market makes or breaks us. I hate to think of how many qualified students will lose out because of this... Reply
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