Word: loaning
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...Just as the taxpayer in the United States has been asked to pay for the savings and loan fiasco, so too are Harvard alumni being asked to bail out the President and Fellows for their egregious lack of oversight in the management of Harvard's money," said one Harvard graduate who is a major contributor to the University. "This is a bailout. It's nothing more complicated than that...
Commercial banks and S&Ls confidently assure loan applicants that under federal law, qualifying for a home mortgage isn't a black-and-white issue -- it's green. Theoretically and legally, the sole criterion is whether the borrower can repay the loan. But a new nationwide survey by the Federal Reserve Board shows that in 1991 banks denied home mortgages to 37% of all black applicants but only 17% of whites. Sadly, income disparities don't account for the gap. Even among the highest income blacks, 23% of applicants were denied loans, vs. 9% for whites of comparable income...
Congress has now responded to the howls of frustrated parents with new financial-aid rules that are meant to make college more affordable to the embattled middle class. Starting last month, any family, however rich, may borrow the entire cost of college, however expensive, with low-interest government loans (though interest payments are not deferred as in other federal loan programs). Outright federal grants will still be scaled to financial need, but home equity and family farms no longer count as part of a household's assets, which means more middle-class families will qualify...
...regulations have forced banks to be highly conservative in judging loans. Lending officers are required to carry out far more documentation, a costly and time-consuming process. They now routinely want business borrowers to provide personal guarantees, sometimes even with their homes as collateral. And if the value of that collateral falls below the outstanding balance of the loan, then bankers may have to classify the debt as being in default -- even though the borrower may have been faithfully making payments...
Lenders have also witnessed the spectacle of seeing S&L executives thrown into jail. This has heightened the fear among bankers and board directors, as well as among their accountants and attorneys, that they could face criminal liability if a loan goes bad and imperils the bank. "There is a real fear among lenders," says Lawrence Hunter, chief economist of the U.S. Chamber of Commerce, "that a bad business decision in this day and age stands the risk of becoming criminal activity...