It appears that most of the high profile news about the "Credit Crunch" is out there. At least this wave. Lenders have had some time to locate and identify enough of the subprime risk that is either currently in their portfolios, been packaged and sold to investors, or in the pipeline and being processed in order to evaluate and put some measure of quantitative valuation on their risk exposure. Some lenders have already started to add loan products back to their menus and some large lenders have decided to retain the loans in their own portfolios instead of selling them to the secondary market. By doing this they do not take the risk of having to sell the loans at a discount which would result in a loss to them. This also is giving them a competitive advantage over less financially sound banks by allowing them to make loans their financially weaker competitors cannot and consequently taking away market share ..
By: Ron Ojeda, Capital Development, Blue Moon Capital, LLC
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