Easy loans don't add to easy Sentiment

Financial Institutions are back to their old tricks, making loans to high-risk borrowers and converting homes to ATMs. But consumer sentiment plunged earlier this month, easy money notwithstanding.

Signs of Risky Lending Emerge - WSJ.com: "Fannie Mae, seized by the U.S. government in 2008 to avert the mortgage company's failure, launched an initiative in January that allows some first-time home buyers to get a loan with a down payment of as little as $1,000. Securities firm Morgan Stanley Smith Barney, a brokerage operation jointly owned by Morgan Stanley and Citigroup Inc., is offering some clients home-equity credit lines of as much as $2.5 million.

Credit-card issuers mailed 84.8 million offers of plastic to U.S. subprime borrowers in the first six months of this year, up from 43.7 million a year earlier, estimates research firm Synovate. Nearly 8% of loans for new cars in the latest quarter went to borrowers with the lowest range of credit scores, up from 6.2% in 2009's fourth quarter, according to J.D. Power & Associates and Fair Isaac Corp."

Survey: Consumers' mood lowest in 11 months - Business - Consumer news - msnbc.com: "U.S. consumer sentiment weakened in early July to its lowest in 11 months on a resurgence in fears about the economy, a year since the recovery began, a private survey released Friday showed.
The reversal in consumer sentiment was dramatic after it reached its strongest level in nearly 2-1/2 years last month on hopes of better job and credit conditions, according to Thomson Reuters/University of Michigan's Surveys of Consumers."