Mortgage Life Insurance In Alberta: You Can Still Find a Bank for a Mortgage
Banks have been cutting their home loan portfolios back, that is for sure, but the careful borrower can still find a mortgage.
Small, locally based lenders are still very actively giving home loans. This is not surprising. The beginning of the mortgage business was really small building and loan societies that funded local expansion with local investments. These banks ar perhaps no longer be called by the same name, but they are doing the same thing, staying local, and this has insulated them from many problems.
They are still able to not only make home loans available, but are even growing 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 poor loans.
Big commercial banks have cut back dramatically in mortgage lending, but the small community banks have continued their mission, even if their growth has slowed.
These financial entities, 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. In fact, many of these banks are not just staying alive, they are earning a profit.
Take, for example, Shorebank, a small community lender serving that city’s poorer community; its delinquency rate is 3.1%, compared to the national average of 18.7%. Since they are working with sub prime customers, their rates are higher, and they are extremely careful about how they manage their loans. 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. If we take profit maximizing as a euphemism for greedy, then this may be one of the main points that separates these banks from the national chains that are on the ropes now.
For example, Douglas Bystry, of Clearinghouse CDFI, earned a salary in 2007 of $190,000, as compared to Angelo Mozilo of Countrywide Financial’s $22.1million salary in 2007. The location of Shorebank is a modest renovated movie theatre, not an expressly built corporate complex.
These kind of lenders usually remain close to their customer base, and by doing so, they can monitor their portfolio and protect their assets better. Shorebank, for example, runs an energy conservation program because they realize that the home loan is more likely to be paid if the homeowner can afford to pay his electric or heating bill.