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April 27, 2010
Phoenix Lending Survey Shows Lenders Concerned About Obama Healthcare Program
PHILADELPHIA (April 27, 2010) —- Although the majority of lenders agreed that TARP was successful because it allowed the U.S. financial system from avoiding levels of further devastation, they are showing concern over the recently approved healthcare program as it will add a tremendous expense to an already overburdened federal deficit, according to the results of last quarter’s Phoenix Management “Lending Climate in America” Survey.
Greater than fifty percent of lenders agree the U.S. government’s Troubled Asset Relief Program (“TARP”) was successful as it allowed the U.S. financial system from avoiding levels of further devastation. One quarter of respondents suggest that the TARP legislation allowed for too much government intervention and has jeopardized the underlying principals of a free market economy, while ten percent believe the Program has successfully allowed many banking institutions to shore up their balance sheets and provide additional liquidity to the marketplace. Six percent are not convinced TARP has had a significant impact on the economy as the credit markets have not showed signs of improvement. The remaining five percent of lenders selected “Other” as their choice regarding the effectiveness of the TARP.
“It is interesting to see that while Lenders are so apprehensive regarding the government’s healthcare program,” said Phoenix Managing Director and Shareholder Michael Jacoby, “they are in accord about the success of another government program ” TARP.”
Just over half of respondents have concerns regarding the recently approved Obama healthcare program as it will add a tremendous expense to an already overburdened federal deficit, which will have a detrimental impact on the U.S. economy. Twenty four percent of participants agreed that while the Obama healthcare program may add to the country’s extended deficit, the current healthcare system needs significant change in the near future. Approximately sixteen percent did not believe the proposed plan would be passed as there are too many controversial factors involved in the legislation. Two percent believe that the healthcare plan is a necessity for the future success of the nation, while the remaining six percent did not select any of the aforementioned choices.
In regards to a report released by the Mortgage Bankers Association, which stated that the percentage of loans in foreclosure or at least one payment behind hit 15% in Q4 2009, the highest level since the Association’s records began in 1972, nearly fifty percent of respondents believe mortgage delinquencies will increase as more foreclosure filings will occur in 2010 as a result of the anticipated wave of variable rate increases on existing mortgages. Forty three percent of participants believe there will be only a minimal change in foreclosure rates in 2010 versus 2009 levels, while eight percent believe mortgage delinquency rates will actually decline in 2010 as a result of government intervention and a slight improvement in the economy. The final two percent selected “Other” factors.
To see the full results of Phoenix’s Lending Climate in America Survey, please visit http://www.phoenixmanagement.com/survey/
Celebrating its 25th Anniversary, Phoenix is an operationally-focused advisory firm, providing turnaround, crisis and interim management and capital advisory services to middle market companies in transition. Since 1985, we have aggressively advocated on behalf of our clients in more than 950 assignments nationwide across a variety of situations and industries. Visit www.phoenixmanagement.com & www.phoenixcapitalresources.com.
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