Mr. Getman predicted that consumer spending would begin to slow if lenders continued to tighten credit standards.

The alarming money supply numbers were a painful signal that the nation's banks and other lenders continued to hold back on credit.

For years, local governments have pressed banks not to exit the projects, so lenders continued to funnel money into unprofitable businesses.

United, in its statement yesterday, said its lenders "continue to be tremendously supportive of us."

The government would presumably be spending even more had the loophole not been closed, as lenders continued to stockpile loans carrying the higher interest rate.

Despite the thorny negotiations, one lender continued to be optimistic that United would pull through.

In many cases, he said, the original lender will continue to "service" the loan and collect the monthly mortgage payments from borrowers.

However, there is a general apprehension among experts in the home mortgage field that many unscrupulous lenders will continue to find loopholes and abuse consumers.

If above then lenders will continue to lend as before.

Some countries do not allow balloon payment mortgages for residential housing: the lender must continue the loan (the reset option is required).