Word: defaulting
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...They also have to face the prospect that people who are poor credit risks can run up tremendous sums on their cards, expose the lender to greater risk, and not have to pay a tenth of a percent in extra interest because they are increasingly likely to default. Congress uses perverse mathematics that no one else has to make certain that banks will write down more money on credit card losses. This gives the government the opportunity to lend the banks more out of the TARP fund...
...Hardin tried to lure business from other states, only to be told that Montana law prohibited incarceration of prisoners convicted out of state. Despite winning a lawsuit last June that would allow it to accept prisoners from anywhere, Two Rivers remains empty; its $27 million in bonds went into default a year...
...more credit for more people, they argue; folks with lower prospects for repayment pay higher interest rates, while good, creditworthy customers don't have to pay as much. Plus, they say, now is exactly the wrong time to relegislate the lending process. Owing to the credit crunch and soaring default rates, card issuers are already reeling in credit limits and accepting fewer new applications. "There are two ways of managing risk - for a particular borrower and across a portfolio," Ken Clayton of the American Bankers Association recently explained. "If risk-based pricing changes, lenders will have no choice...
...also known as the jumbo-mortgage limit, rose 127% in the first ten weeks of this year compared to the same period a year ago. Bloomberg, reports that "about $500 billion of prime-jumbo mortgages are bundled into bonds, according to Memphis, Tennessee-based FTN Financial." The default rate on those bonds may rise as high as 10%, leaving banks with yet another set of substantial write-offs...
Hardin tried to recover. It sued the state for supposed mixed messages of encouragement - even though Montana prohibits the incarceration of prisoners convicted out of state. But though Hardin won the case, Two Rivers stayed empty and the $27 million of bonds went into default a year ago.(See one man's struggle to adjust to life outside of prison...