| Japanese lenders deny loans to credit risks
TOKYO: Aiful, Japan's biggest consumer lender, and its two closest rivals rejected more than half of loan applicants in January as they seek to trim costs by weeding out borrowers who could default. Aiful cut approvals by half, granting unsecured personal loans to 36 percent of applicants in January, compared with 72 percent in February 2006, according to data on its Web site. Acom, the second-biggest lender, cut approvals by a third to 47 percent in the same period. Promise ratified 40 percent. Bad-loan costs have mounted in the $170 billion consumer finance industry since Japan's courts last year opened the door for borrowers to claim refunds of interest and regulators reined in collection tactics. The three biggest lenders forecast a combined $5 billion loss in the year to March 31 and may struggle to return to profit as a new law caps their charges at the same level as banks.
Govt wants banks to go slow on sensitive sectors
MUMBAI: The government is nudging all public sector banks to go slow on loans to sensitive sectors like stock market and real estate and prune outstandings like credit card receivables. In a recent letter to the state-owned banks, the finance ministry has said "public sector banks need to have a re-look at the continued high credit growth in the sensitive sectors and take necessary steps for rebalancing overall credit portfolio." The March 29 letter, issued by Amitabh Verma, joint secretary in the banking division, comes against the backdrop of a continued rise in the share of sensitive credit — real estate, commodities and stock market. The banking regulator, RBI, has also shown concern on ballooning personal loans and credit card portfolio of banks. These loans are unsecured in nature and are more prone to defaults.
Basement problems undisclosed, undetected
Q: My daughter and her family purchased a 1970s ranch-style home after the professional inspector she hired gave it and the finished basement a clean bill of health. The seller even signed a ``no water problems'' statement in the closing papers. Within days, her sister noticed her fingers could go through the drywall in the cellar. The brand-new bathroom shower was not connected to the septic system, and flooded the floor. Mold and water remediation followed, costing more than $12,000. The lawyer who handled the closing settlement won't help. What recourse does she have against the seller and inspector? -- Sara C. A: Obviously, your daughter bought the house from a dishonest seller who signed a fraudulent defect-disclosure statement. If the bathroom shower was new, she should have inquired as to whether a building permit had been obtained and whether the local building inspector approved the work.
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