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P2P banking

Interesting, even if it is a P2P bank for hardware geeks.

Then again, the country needs more hardware geeks. And fewer quants.

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Submitted by jawbone on

per this NYTimes article.

WHEN banks say no, owners of cash-starved small-businesses aren't giving up on finding loans. Many are turning to microlenders for the money they need to meet the payroll, buy supplies, pay the rent and keep the lights and heat on.

These microlenders — community-based nonprofit lenders that draw on a varying mix of financing from the Small Business Administration; other federal, state and local government agencies; and some philanthropies — say small businesses and entrepreneurs are increasingly seeking financing as home equity loans, credit lines and other loans have all but evaporated.

Adding to the pinch, credit card companies are slashing spending limits for many cardholders, including some longtime small-business customers who have relied on their credit lines as a source of ready cash.

Even profitable small businesses that once relied on banks for financing are depending more on microlending, a resource that was originally intended to be a lifeline for women, low-income and minority entrepreneurs.

Microlenders around the country say they are encountering a rush of inquiries and an increase in applications for their loans, which usually range from $5,000 to $35,000.

But, for hedgies, Obama-Geithner offer a great deal! And, as Masaccio at Firedoglake points out, billions for hedge funds, zip for homeowners. Such a deal we get with this administration!

Individual homeowners? In what cannot be a surprise to anyone familiar with the power of money, the WSJ reports that the bankruptcy cramdown bill is in trouble in the Senate.

Financial institutions strongly oppose court-ordered mortgage workouts, saying they would increase risks for lenders, raise mortgage rates and clog courts.

The reasons cited by industry are nonsense. There is no increase in risk to lenders. The amendment only applies to existing loans, which are totally at risk now. It won’t increase mortgage rates on future loans, since it won’t be available on future loans. And it certainly won’t clog bankruptcy courts: what it will do is give the American people leverage to bargain with the financial giants.

Why should the rich take a hit? With their servant/cowards in Congress, they simply refuse to acknowledge the role of the financial industry in the disaster, including the massive rise in mortgage fraud, hammered home in two recent reports. First

The number of mortgage fraud reports among loans made last year grew 26% from a year earlier, according to a study released Monday by the Mortgage Asset Research Institute.

The Mortgage Asset Research Institute, Inc., is a Lexis-Nexis company with software to sell, software designed to help banks ferret out mortgage fraud. Their web page opens with this sentence:

Mortgage fraud perpetrated by industry insiders accounts for 80 percent of all reported mortgage fraud losses. (Source links for quotes at Masaccio link)

Hey, Timmie, who's your daddy?