Borrowers

Margaret Newton, 75, a retired school custodian, wanted new siding to make her rowhouse in a sadly deteriorated section of Frankford look pretty. Judith Fowler, a staff aide at a homeless shelter, wanted new doors to stop the cold drafts that chilled her house in North Philadelphia. Priscilla Fountain, a 73-year-old widow, wanted to spruce up her Nicetown rowhouse with new carpeting and some interior painting. All three women sought loans last year from a Louisiana company called UC Lending, which has been rapidly expanding in the Philadelphia area.

   Small-business lending is down.    Pick a reason, but that won't change the fact that lots of small firms would like to borrow money to expand or buy some new equipment right now.    So, what to do?    Well, the Philadelphia District of U.S. Small Business Administration is planning to host four "matchmaking events" this month where hopeful borrowers can pitch willing lenders. And the price seems right: free.    The first will be held next Wednesday at the Radisson Valley Forge Hotel in King of Prussia from 9 a.m. to noon.

Anybody around here wanna borrow some money? Their phraseology may be a bit more elegant, but that's essentially what bankers are asking these days, as the national and regional economies continue an oh-so-slow recovery from recession. It's a question that is casting a shadow on an otherwise remarkable recovery by most commercial banks and savings institutions from the dark days of 1990 and '91, when the recession and plunging real estate markets pushed many of them toward - and some over - the brink of insolvency.

Government help is on the way for some Pennsylvania and New Jersey homeowners facing unaffordable increases in monthly payments on adjustable-rate mortgages - sometimes called "exploding ARMs. " The board of the New Jersey Housing and Mortgage Finance Agency plans to issue $30 million in taxable bonds and will vote next week on rules for the program, which aims to keep subprime borrowers in their houses. In Pennsylvania, the Housing Finance Agency is planning a similar refinancing program funded initially with $25 million to $50 million in taxable bonds.

A Philadelphia businesswoman who specialized in obtaining "micro loans" of less than $30,000 for small and start-up businesses was accused by a federal grand jury yesterday of stealing $664,544 from banks and borrowers with which she worked. Linda M. Brusco, also known as Linda M. Karl and Linda Giordano, the president and an owner of Partners for Small Business Development, was indicted on one count of mail fraud and 27 counts of loan fraud in a scheme prosecutors allege ran from May 2002 through December 2005.

America's biggest financial institutions have been searching for profits in an unlikely place: poor neighborhoods of older cities such as Philadelphia. The city's worn rowhouse neighborhoods hosted a surprising gold rush in the late 1990s. Wall Street, major banks, and retirement-fund investors financed a surge of high-priced loans to homeowners with damaged credit. Now some of the most active lenders are bankrupt - and the gold rush is turning into a land grab. The number of Philadelphians who have lost their homes in mortgage foreclosures has nearly tripled in the past three years as creditors try to collect their unpaid loans.

Who's to blame? During the last few weeks, we've seen a bellyful of finger-pointing. But who really caused the financial meltdown? Greedy Wall Street CEOs are the most popular whipping boys. A Wall Street friend told me that what went on there was nothing short of "collective insanity. " The Federal Reserve's easy-money policy, some regulatory relaxation by the Securities and Exchange Commission, new investment vehicles that made traditional products look so yesteryear, foolish decisions about the quality of these vehicles by the ratings agencies - all played key roles.

We've all seen the advertisements. They promise "quick cash till payday" or "quick financial fixes. " Just fill out a few simple forms, and short-term cash-flow problems are solved. But as the saying goes, if it sounds too good to be true, it probably is. Payday lenders hook consumers into a cycle of unmanageable debt, as borrowers saddled with outrageous fees take out new loans to pay the old. To make matters worse, the Pennsylvania General Assembly is now considering a measure that would legitimize the payday lending industry rather than protect consumers by cracking down on the lenders' questionable legal standing.

In the annals of financial fiascoes, the subprime-lending crisis has been especially big, messy and legally complex. What's more, people could end up going to jail. A propitious moment, in other words, for entrepreneurial law firms looking to add clients and generate new revenue, even as the larger economy evinces signs of weakness. For weeks, a drumbeat has emerged from Philadelphia law firms calling attention to new or existing practice groups focusing on the subprime mess.

When interest rates are going down, mortgage borrowers may have second thoughts about those higher rates they locked in. But since rates started climbing back in January, have more mortgage lenders been trying to back out of loans they have promised? Apparently not, say banking regulators in Pennsylvania and New Jersey. So far, the state agencies have not been getting more complaints about that than usual. That is a far cry from what happened in 1986-87, the last time there was a big rush to refinance home mortgages.