If you’ve been looking for a consumer loan of any kind, you know already that bank lending has changed dramatically in the past year. And, though things might not be looking that great right now, the Federal Reserve System has just released their July 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices for the period of April through June.

About bank lending for prime residential mortgages:

• Only 17.6% said their standards were tighter.
• 78.4% said their standards remained basically unchanged.

About bank lending for nontraditional residential mortgages:

• 45.8% said their standards were tighter.
• 54.2% said their standards remained basically unchanged.

(There were no figures available for sub-prime residential mortgages because so few loan officers responded to the question.)

About bank lending standards for new revolving home equity lines of credit:

• 35.9% said their standards were tighter.
• 60.4% said their standards remained basically unchanged.

About bank lending standards for existing revolving home equity lines of credit:

• 35.3% said their banks reduced limits on existing revolving home equity lines of credit.

About bank lending standards for new consumer credit cards:

• 36.3% said their standards were tighter.
• 64.7% said their standards remained basically unchanged.

About bank lending terms and conditions for existing consumer credit cards:

• 50% said their banks reduced credit limits.

The surveyed loan officers were also asked to predict if or when their lending practices would loosen up.

• Only 2.1% said bank lending for prime residential real estate loans, (including home equity lines of credit) would loosen up by the end of 2009.
• 6.3% said in the first half of 2010.
• 27.1% said in the second half of 2010.
• 12.5% said in 2011.
• 41.7% said their bank’s standards for residential real estate loans wouldn’t loosen up anytime in the foreseeable future.

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I spent last week in Key West at a friend's house and had a great time.

Okay, outside of the fishing, snorkeling, and the plaque I should get from all the bar stool time I spent at the Green Parrot, I won't rub it in.

But on the flight back I read in the Miami Herald how consumer confidence in the Sunshine State was off three points this month. That seemed strange -- Florida is job-heavy and leads the country in new construction and new residents. That's not to mention the absence of a state tax.

So I read where nationally, consumer confidence was way up in May, fueled by optimism about the job market and the seeming ease in housing woes across the country.

So is Florida an aberration? I think so. Economic numbers spike up and down all the time, especially at the state and regional levels. Not so much with the national figures, where today the Conference Board reported that its Consumer Confidence Index rose to 108.0 in May, up from a revised 106.3 in April. Wall Street numbers-crunchers had forecast the Index to fall to 104.5. The May reading was the highest since March when the index was at 108.2.

Most analysts are, as usual, hedging their bets. But I do note a sense of encouragement on consumer sentiment. "The short-term outlook remains cautious and rising gasoline prices are having a negative impact on consumers' inflation expectations," says Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. "(But) All in all, confidence levels continue to suggest growth, albeit at a slow pace."

Growth at a small pace after five years of high growth? I'll take that any day of the week. The economy can't be running on all cylinders all of the time -- there has to be periods of readjustment along the way. As long as such periods stay in positive territory, as we're seeing now, then we're in good shape.

Could the sub prime debacle bleed into the overall economy - and take your small business along with it?

Probably not -- but a little education can go a long way in preparing for any negative impact that the collapsing real estate market may have on your business.

First some fresh facts. The Wall Street Journal reports that the Securities and Exchange Commission's enforcement division is investigating whether any securities regulations were broken in connection with recent problems in the sub prime mortgage industry.

Wall Street analysts point to New Century Financial Corp., an Irvine, Calif.-based home lender that recently cut off funding to bank lenders, as the first and primary stop by federal regulators looking into the sub prime mess. The Journal reports that the SEC is probing the events leading up to its announcement that it would restate financial results for the first three quarters of last year.

Congress is also getting into the act. Senate Banking Committee Chairman Christopher Dodd, D.-Conn., has invited the chief executives of New Century and four other sub prime lending companies to testify before his committee this week.

Why all the hoopla? For starters, the growing number of delinquencies and foreclosures means a skidding stop to the once-roaring real estate market. According to a recent report from First American CoreLogic Americans borrowed $2.2 trillion from 2004 through 2006 in the form of adjustable loans, which start with low monthly payments that reset to higher rates. As those loans reset, 1.11 million people will lose their homes.

Analysts say that as home prices appreciated quickly, home buyers swarmed to lenders offering option-heavy adjustable-rate loans that made it simpler for borrowers to buy more expensive homes. But a declining real estate market means that buyers who took out the loans as the housing explosion was coming to an end made little or no money off their investments. According to the CoreLogic report, it's those borrowers who are most likely to wind up in default because they won't be able refinance or sell their homes at profit to cope with higher monthly payments.

"This isn't just sub prime," Christopher Thornberg, an economist with the consulting firm Beacon Economics in Los Angeles, told The Associated Press. "This problem is starting to occur in most of the adjustable- rate mortgages. Even for prime borrowers, we're seeing a big spike in delinquencies among adjustable-rate mortgages."

Small business owners who own adjustable-rate mortgages have limited options. You can try and refinance to a lower fixed rate, but check first for any language in your mortgage contract that says you can or cannot refinance over a specific period of time. For example, some  option-arm deals prevent you from refinancing for one, two, or even three years. If you see your mortgage rate skyrocketing, that’s your best option. If you can manage to swing the payments for a year, even as they rise, chances are the real estate market bust will peter out and prices will go back up again.

No matter what, the sub prime debacle is bad news for millions of homeowners, and by extension, the businesses they buy from. Common sense tells us that if cash-strapped Americans have less money to spend, it's the small business guy who gets hit first -- and hardest.

OK, I was afraid of this . . .

It's one thing to see a handful of homeowners crying in their beer over their adjustable-rate mortgage payments going up.

If my Dad taught me one thing, it's buyer beware. So I only have so  much sympathy.

But it's quite another when that guy's friends and neighbors start  fretting about the housing market - - and start putting the breaks on  their spending habits. That's what's happening with the all-important Consumer Confidence  Index, which is falling for the first time in a while. According to the Conference Board, its consumer confidence index fell sharply in August (to 105.0 from 112.6 in July), as home values continued to decline, stock prices dropped, and employment growth slowed.

A handful of other measures of investor confidence also declined during August, including the ABC/Washington Post consumer confidence index and the University of Michigan ’s consumer expectations index —  a key leading economic and stock market indicator.

That's disturbing news for small businesses, which could soon feel the pinch of decreased consumer spending. It's not going to help the stock market, either. Historically, when consumer confidence wanes, stock market performance suffers, as well.

I wish I could say that the economic environment will get any better soon. The most recent S&P/Case-Shiller home price index shows  that U.S. home prices fell by a record amount in the second quarter, as banks tightened their lending standards and home sales fell.

So what we have now is a perfect storm brewing that threatens the U.S. economy. Lousy credit, a decline in consumer confidence, and a struggling stock market all combine to spell bad news for the U.S. economy. To me, consumer confidence is particularly worrisome. The Consumer Confidence Index accounts for 70% of all spending in the U.S. -- to see it in retreat is a real red flag.

One sure sign that the Conference Board numbers are for real is in the second-quarter numbers from Wal-Mart and Home Depot. Both are bellwethers of consumer spending trends and both are reported lousy second quarter sales and earnings, as consumers significantly reduced their discretionary spending. Wal-Mart’s same-store sales rose by the smallest amount (1.9 percent) since the company began tracking same-store sales in 1980, while Home Depot’s second-quarter same-store sales fell 5.2 percent.

The storm is brewing. Could be time to batten down the hatches.

I'm blogging on the road today on the way to New York and noticed a nice piece from my old buddies at Newsmax.com (full disclosure: I used to write Newsmax's daily financial commentary from 2003-2005) on the jobs picture and on prospects for the U.S. economy.

I follow a wide variety of different business news and opinion sites and I'd slot Newsmax into the more right-of-center, pro-Wall Street publishers and that's perfectly fine. But lately, I've noticed a more bearish tilt coming from Newsmax, with more and more editorials touting tough economic times ahead. Again, no problem there - - I've penned a few blogs on these pages talking about the same scenario.

In today's editorial, Newsmax notes that  the U.S. Department of Labor reported that non-farm payrolls rose by 132,000 in May and that the unemployment rate held steady for the second month in a row at 4.5 percent. The payrolls report was cheered by Wall Street “experts” as an indication that the U.S. economy is healthy and that the bull market in equities is firmly intact.

But the financial gurus at Newsmax see these numbers as skewed, and  see any concuding U.S. economic scenario as anything but "healthy".

Says Newsmax: "While we agree that the employment report was favorable and that the U.S. economy is still expanding, a closer look at the payrolls report suggests the best days might already be behind us. And, the fact that the U.S. economy grew at an annualized rate of  only 0.7 percent during the first quarter of 2007 is certainly nothing to shout home about."

The editors point to the fact that the lion's share of May’s employment gains came from the service sector where 135,000 jobs were created, and the federal government, which added 40,000 jobs. At the same time, 24,000 jobs were lost in the retail sector, while the important manufacturing sector suffered a loss of 18,000 jobs.

Peering deeper into the future, the folks at Newsmax say that job growth is actually in full retreat, and the U.S. economy in full retreat mode right behind. "Job creation has slowed considerably since March 2006. Even more important, the number of hours worked by  manufacturing production workers has been trending significantly lower over the past year. Not surprisingly, we rarely (if ever) hear the major financial media or Wall Street “experts” comment on these trends."

The editorial also notes that the help-wanted sections of major newspapers are in decline, as well (although I would argue that's because fewer people rely on newspapers for their information these days, a fact reflected in subscription losses from major U.S. newspapers across the board.) But, as Newsmax points out, on-line job board ads fell by 2% last month, as well.

I'm inclined to agree with Newsmax that the rosy scenario painted by the U.S. Department of Labor, based on the last jobs report, ain't so rosy. We've had six years of sustained growth and we could well be topping out. And if we were, the jobs picture would be the first  place to go to verify that.

But, as Newsmax proves, you have to do a little digging first to get the real story.

Maybe the housing bubble won't "burst" after all.

This after more news from the real estate sector, where the U.S. Commerce Department reports that  Sales of new U.S. homes rose 16.2 percent in April, the sharpest climb in 15 years, while prices fell a record 11 percent. 

Are we seeing a 'rebound" effect, where lower home prices are luring buyers back into the market in droves -- a trend that seems to be backed by the Commerce Dept. report?

It sure looks that way. 

According to Commerce, new single-family home sales rose to an annual rate of 981,000 units from a revised rate of 844,000 in March. Wall Street analysts were expecting April sales to rise to an 860,000 unit pace from a previously reported rate of 858,000 units in March. In April, the median sales price of a new home fell $28,500 to $229,100 from $257,600 in March. There were 538,000 new homes for sale in April, a fall from the 546,000 reported in March. It would take 6.5 months to clear that inventory at the current sales pace, less than the 8.1 months recorded in March.

Later today we should get another bellwether indicator on the future of the U.S. housing market. Existing home sales, which represent 85 percent of the housing market, should rise as well.  According to a report this morning from Reuters, analysts are expecting April existing home sales to rise to 6.14 million unit pace from the 6.12 million in March.

If that comes to pass, then we should expect to see a reduction in the "doom and gloom" bubble-burst stories coming from the U.S. media. It's about time.