According to the Dean of Golden Gate University Business School, Terry Connelly, interest rates could drop as soon as next month. ABC7 News met with a man who certainly hopes that's the case because he has been hit by all sides of this credit crunch. Remember Joe the Plumber? Now meet Eric the Builder.
His name is Eric Hammer, appropriate, since he's a general contractor. But Hammer got nailed recently when he went to borrow against his $600,000 home - he owned free and clear.
"We tried to pull $150,000 out, I've got great credit, I have a great job, I have a good income - it took over eight weeks and we were told we were extremely lucky to get that," said Hammer.
Then Hammer went for a construction loan on a four house project he has near Santa Cruz - forget it.
"It's impossible to get the money flowing," said Hammer.
That should change in the next month or so when what was announced on Tuesday actually hits the marketplace when $200 billion dollars from the Federal Reserve will be used to loosen up credit card, student, car and small business loans.
"Credit card rates are climbing, making it more expensive for families to finance every day purchases. This lack of affordable consumer credit confines consumer spending and weakens our economy," said Henry Paulson, Treasury Secretary.
You don't have to tell Kacey Parvizad about the need for better access to student loans - he wishes he took out a bigger one when the getting was good.
"I'm just a little bit worried about going in and asking them because the economy is so bad and I don't know what the answer would be," said Kacey Parvizad, Golden Gate University Law student.
The second program means $600 billion dollars for homeowners - not just those underwater - for all homeowners.
Golden Gate University Business School Dean Terry Connelly says this plan could work:
"It makes it easier to refinance, that makes credit available to first time homeowners on an affordable basis," said Connelly.
The FDIC said that the number of banks jumped 50 percent the second quarter to third quarter up to 171.