Local banks still doing mortgages
Toolbox
Published: September 7, 2007
There has been much recent media coverage of the so-called "mortgage crisis." Unfortunately, the full story hasn't been told. All lenders are not the same, and community banks are as eager to lend as ever.
There is a liquidity crisis for many mortgage companies and mortgage brokers. They rely on investors to fund loans, and that has almost dried up overnight. Mortgage bankers are shuttering operations, laying off workers, and pulling out of loan commitments across the country. Underwriting guidelines are being tightened and many of the irresponsible loan products of recent years are being eliminated or scaled back.
It is business as usual for community banks. First, community banks are not tightening underwriting requirements because they didn't offer irresponsible loan products in the first place. Also, mortgage funding is almost unlimited because funds to lend come from depositors, the Federal Home Loan Bank system, and government-chartered agencies like Freddie Mac and Fannie Mae. Community banks don't rely on faceless investors across the globe who may disappear tomorrow.
There is a great deal of uncertainty in the mortgage market. Community banks offer consumers reliable and responsible loans at fair prices. Why take chances somewhere else?
KEN WELLS
(Vice president,
Mascoma Savings Bank)
Lebanon, N.H.
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