I have friends who have been renovating an old farmhouse. They had completed much of the work by the end of the year, but needed several items to be able to move in by the middle of February. Things like appliances, kitchen cabinets, flooring ... things that would have taken them a year or so to complete with their available cash flow.
So in steps my friend's father to help them get the place livable sooner. His plan is to advance them some cash to get things done quickly, get a loan using his house as collateral to pay for the remaining work needed, then have them get new appraisals and refinance their house to be able to pay him back. ...
This seemed like a solid plan. They bought appliances a few weeks ago and planned for a variety of contractors to come in and finish the remaining work. Then word came this week that the father's loan was denied.
He and his wife are both older professionals and have a net worth well in excess of a million dollars. Their house alone has over $800,000 equity and yet they don't qualify for a $40,000 loan? Something is very wrong here.
And now I read on the rec list that Merrill Lynch is paying out billions in bonuses using bailout funds. Folks, we've done been had. The SOBs have robbed us blind yet again. No more funds without EFFECTIVE OVERSIGHT!