Ontario Life Insurance Quotes: You Can Still Find a Bank for a Mortgage
3:14 AM
There is no doubt that mortgage originations are lower than they have been in years, but there are still many banks that are making mortgage loans.
Small, regionally based banks are still very actively giving home loans. This is not surprising. The origin of the mortgage business was small, locally focused "building societies", who took in deposits from local citizens to lend out to local homebuyers. Of course, they go by other 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They are actively lending to their customary clients and even expanding to absorb the slack where other lenders are no longer active.
The large, conventional banks are cutting back on mortgages across the board, but local, community based banks are predicting continued stability in their lending business, although with not much growth.
Community lenders such as this, which may include credit unions and development banks, have had great success in lending to the so-called sub prime borrower, because they stay close to the customer they are lending to. These banks are not just getting by, they are thriving.
A good example is Shorebank of Chicago, a $2.3billion asset bank which serves the low income community of this city and, in contrast to the national average of delinquencies of 18.7%, has only 3.1%. These lenders charge market rates which are higher than those available to prime borrowers, and manage their risk carefully. They strive to be profitable, but not to be involved in "profit maximizing" according to Mark Pinsky, CEO of Opportunity Finance Network, an umbrella entity for community development finance institutions. Should we read profit maximizing as "greedy", a term that has been used with most of the mainstream lending institutions that are now reeling from the sub prime mortgage crisis?
If you look at the salary of a CEO of one of these small community based organizations, such as that of Douglas Bystry of Clearinghouse CDFI, at $190,000 in comparison to that of Angelo Mozilo, CEO of Countrywide Financial at $22.1million, you can realize the problem. Besides salaries, another example might be everyday decisions; Shorebank has its headquarters in a renovated building, not a new corporate high rise.
This breed of sub prime lenders are committed to the locale and so to the loans they make, and instead of merely originating the loans and reselling as most major lenders do, they use initiatives that help insure the loans will be paid. Shorebank, for instance, runs an energy conservation program since they realize that the mortgage is more likely to be paid if the homeowner can afford to pay his electric or heating bill.
Small, regionally based banks are still very actively giving home loans. This is not surprising. The origin of the mortgage business was small, locally focused "building societies", who took in deposits from local citizens to lend out to local homebuyers. Of course, they go by other 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 actively lending to their customary clients and even expanding to absorb the slack where other lenders are no longer active.
The large, conventional banks are cutting back on mortgages across the board, but local, community based banks are predicting continued stability in their lending business, although with not much growth.
Community lenders such as this, which may include credit unions and development banks, have had great success in lending to the so-called sub prime borrower, because they stay close to the customer they are lending to. These banks are not just getting by, they are thriving.
A good example is Shorebank of Chicago, a $2.3billion asset bank which serves the low income community of this city and, in contrast to the national average of delinquencies of 18.7%, has only 3.1%. These lenders charge market rates which are higher than those available to prime borrowers, and manage their risk carefully. They strive to be profitable, but not to be involved in "profit maximizing" according to Mark Pinsky, CEO of Opportunity Finance Network, an umbrella entity for community development finance institutions. Should we read profit maximizing as "greedy", a term that has been used with most of the mainstream lending institutions that are now reeling from the sub prime mortgage crisis?
If you look at the salary of a CEO of one of these small community based organizations, such as that of Douglas Bystry of Clearinghouse CDFI, at $190,000 in comparison to that of Angelo Mozilo, CEO of Countrywide Financial at $22.1million, you can realize the problem. Besides salaries, another example might be everyday decisions; Shorebank has its headquarters in a renovated building, not a new corporate high rise.
This breed of sub prime lenders are committed to the locale and so to the loans they make, and instead of merely originating the loans and reselling as most major lenders do, they use initiatives that help insure the loans will be paid. Shorebank, for instance, runs an energy conservation program since they realize that the mortgage is more likely to be paid if the homeowner can afford to pay his electric or heating bill.
About the Author:
Thank you for your interest in our article.For more information, visit: alberta mortgage interest rates or meilleur assurance pret hypotheque
You can leave a response, or trackback from your own site.