Crunch may hit consumer

The turmoil that started in the mortgage market and ripped through other credit markets has not impacted credit card, auto and other consumer loans in a big way.

Some experts fear that it might, though, especially if the economy weakens.

Soaring delinquency rates on subprime mortgages have caused investors to turn their backs on securities backed by risky home loans. As a result, many lenders have cut back or stopped making mortgages other than conforming loans that can be sold to Fannie Mae and Freddie Mac. That means borrowers have to pay more for non-conforming loans - including jumbo loans over $417,000 - than they did a few months ago, if they can get them at all.

Many credit card, auto and college loans are also packaged into asset-backed securities that are sold to investors. Demand for these securities has also declined in the aftermath of the credit crisis. "A number of securitization deals have been delayed or shelved," mainly because the loan originators and investors couldn't agree on a price, says Tom Deutsch, associate director of the American Securitization Forum.

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