Everyone knows that the home loan market is in a mess, but there are still plenty of lenders who are lending.
Many local banks never were involved in the credit mess and are actively originating loans. This is not surprising. The beginning of the mortgage business was really small building and loan associations that funded local expansion with local investments. Of course, they go by different names nowadays, but lenders that focused on their core business and area have for the most part avoided many of the problems in banking.
They are still able to not only make mortgages available, but are even expanding their mortgage portfolios to fill some of the gap created by the big players who have been forced out of the market because of rapid expansion in low quality loans.
Big commercial lenders have cut back dramatically in mortgage lending, but the small community banks are continuing their mission, even if their growth has slowed.
These financial institutions, which include development banks and credit unions and may even be non-profit entities, have been very successful lending to poor risk borrowers because they are involved with the customer. These banks are not just managing, they are thriving.
Take, for example, Shorebank, a small community bank serving that city's poorer community; its delinquency rate is 3.1%, in comparison to a national average of 18.7%. They charge market rates which are higher than those available to prime borrowers, and manage their risk prudently. They do have profit as an objective, but they do not aim for "profit maximization" in the words of Mark Pinsky, the chief of Opportunity Finance Network. Reading between the lines, profit maximizing can be understood to represent the greed that has been one of the foundations of the financial markets' current woes.
For example, Douglas Bystry, of Clearinghouse CDFI, earned a salary in 2007 of $190,000, in comparison to Angelo Mozilo of Countrywide Financial's $22.1million package in 2007. Besides salaries, another example might be business decisions; Shorebank has its headquarters in a renovated building, not a new corporate high rise.
This is a group of lenders who are worlds away from the big lenders, but close to the loans they originate, continuing to service them and therefore keeping in touch with the economic health of their borrowers. Take the program managed by Shorebank that educates its borrowers in energy conservation to save costs, money saved that can contribute to paying the mortgage.
Many local banks never were involved in the credit mess and are actively originating loans. This is not surprising. The beginning of the mortgage business was really small building and loan associations that funded local expansion with local investments. Of course, they go by different names nowadays, but lenders that focused on their core business and area have for the most part avoided many of the problems in banking.
They are still able to not only make mortgages available, but are even expanding their mortgage portfolios to fill some of the gap created by the big players who have been forced out of the market because of rapid expansion in low quality loans.
Big commercial lenders have cut back dramatically in mortgage lending, but the small community banks are continuing their mission, even if their growth has slowed.
These financial institutions, which include development banks and credit unions and may even be non-profit entities, have been very successful lending to poor risk borrowers because they are involved with the customer. These banks are not just managing, they are thriving.
Take, for example, Shorebank, a small community bank serving that city's poorer community; its delinquency rate is 3.1%, in comparison to a national average of 18.7%. They charge market rates which are higher than those available to prime borrowers, and manage their risk prudently. They do have profit as an objective, but they do not aim for "profit maximization" in the words of Mark Pinsky, the chief of Opportunity Finance Network. Reading between the lines, profit maximizing can be understood to represent the greed that has been one of the foundations of the financial markets' current woes.
For example, Douglas Bystry, of Clearinghouse CDFI, earned a salary in 2007 of $190,000, in comparison to Angelo Mozilo of Countrywide Financial's $22.1million package in 2007. Besides salaries, another example might be business decisions; Shorebank has its headquarters in a renovated building, not a new corporate high rise.
This is a group of lenders who are worlds away from the big lenders, but close to the loans they originate, continuing to service them and therefore keeping in touch with the economic health of their borrowers. Take the program managed by Shorebank that educates its borrowers in energy conservation to save costs, money saved that can contribute to paying the mortgage.
About the Author:
Thank you for reading our article.You may be interested in alberta mortgage rates and don't forget ontario life insurance quotes
No comments:
Post a Comment