Friday, August 17, 2007

Did your lender just disappear? Here’s a solution.

I heard something today about Western National Bank offering to bail out homebuyers who have been left in the lerch, since quite a few mortgage companies have closed their doors recently. My first thought was, "what a shameless publicity stunt – I'm sure any bank or broker would be happy to make more loans." Well, tonight I read an article which gave some additional information, and I have to say I'm impressed. Here's why:

  1. They've secured additional funding to make this program work. (yes, that could be because they want more business, but it shows they're making some extra effort.)

  2. They're making loans with little to no closing costs. (and unlike many lenders out there, they're not making extra money on the back end with higher rates, yield spread premiums, or volume bonuses. No gimmicks on this one – just low cost loans.)

  3. They're being very direct in saying these are temporary, help-get-you-out-of-a-jam loans. They aren't the best loans, but they're reasonable. Borrowers are encouraged to find long-term, permanent financing as soon as possible.

  4. The CEO will personally review each of the credit applications. This is similar to #1 above – it shows these loans are not part of the bank's everyday lending portfolio.

While the bank stands to make some money from this program, I guess that's only fair. It does seem to me to be a win-win, which is why I'm giving kudos to Western National Bank.

Read the article here.

Visit their web site here.

- Chris Butterworth