There has been a great deal
of recent media coverage of
what they refer to as a “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. Ken Wells, Vice President
of Retail Lending and CRA
Officer at Mascoma Savings
Bank answers a few questions
and explains that community
banks are unaffected.
Q: Is there really a mortgage crisis?
A: There is a liquidity crisis for many
mortgage companies and mortgage brokers
that don’t have deposits they can use to
originate loans. These companies rely on
Wall Street banks and other investors to
supply the money they loan, and those
sources have almost dried up overnight.
Q: Who does this most affect?
A: Probably mortgage brokers. Many
mortgage bankers and brokers 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.
Q: How does this affect Mascoma
Savings Bank and the way you do
A: It really doesn’t. Since we never changed
our underwriting guidelines and never
considered offering the types of risky loans
that were at the root of the problem, we
haven’t changed anything.
Q: But does Mascoma
Savings Bank have to worry
about access to funds to
A: Again there’s no real change in
that area for us, and it’s certainly
not a concern. Our mortgage
funding is almost unlimited
because funds to loan come
from depositors, the Federal
Home Loan Bank system, and
like Freddie Mac and Fannie Mae.
Q: What is the nature of the mortgage
A: While from an investment perspective
there is a great deal of uncertainty in the
mortgage market, for the average borrower
who would come to a community bank
like Mascoma Savings Bank, not much
has changed. We can still offer consumers
reliable and responsible loans at fair prices.