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Bad Loans Come Back To Bite You

Sub-prime loan meltdown, as the headlines say:

Some lenders to the U.S. sub-prime market, which takes in borrowers with poor credit credentials, are being battered by rising defaults and increasing demand by their own lenders to recall soured loans at a loss.

One analyst said Australia's biggest four banks were only marginally exposed to such loans - about 2 to 3 per cent of the $800 billion home-loan market - and would not be concerned.

Burdett Buckeridge & Young banking analyst John Buonaccorsi said there was not much of a sub-prime market in Australia because such customers would not pass credit-scoring tests employed by local banks.

"If you are below a certain level here you are assigned as sub-prime and banks will tell you to go somewhere else," Mr Buonaccorsi said.

Goodness. Imagine that. If you have bad credit, they won't lend you money. Who came up with that crazy idea?

I think it's heartily unfair of anyone to blame the lenders who gave people mortgages they couldn't afford. It's all just shocking, really.

By min | March 14, 2007, 3:34 PM | Ummm... Other?