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Subprime having little impact in Bulloch
Boro area lenders say mortgages available for credit-worthy customers
083107 BIZ BANKSWeb
Rhonda Busby of Wachovia Mortgage, far left, Alana Avret and Joe Lanier of Sea Island Bank/Synovus Mortgage, Jim Lanier of Farmers & Merchants Bank, and Kelly Kahley of First Southern National Bank (clockwise) discuss mortgage lending issues in Bulloch County.

             Local mortgage lenders feel bombarded by national news stories reporting foreclosure and bankruptcy in the mortgage industry.

            "The mortgage lending industry is doing just fine," said Rhonda Busby, a mortgage loan office with Wachovia Bank in Statesboro. "Every night on the news there are stories of doom and gloom in the mortgage business. Homebuyers with good to excellent credit are not having problems getting a mortgage."

            Busby said the sector of the mortgage industry that has been affected the most is the "subprime" sector. Subprime borrowers are generally those with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can't afford to refinance or even sell their homes.

            Many local mortgage professionals feel the "loose" underwriting guidelines for subprime mortgage loans led to many loans being made which shouldn't have.

            "Over the last several years, people were getting into homes that they probably couldn't afford," said Rick Mock, a partner in My South Lending, a mortgage brokerage firm on South Main Street in Statesboro. "They couldn't handle the responsibility that came with the type of mortgage that they signed up for."

            "In reality, there were some loan programs being offered by mortgage companies that were not good for customers. I have always tried to steer our customers away from those, but people get their sites set on a certain home and will do whatever it takes to get into it."

            Busby agrees that many underwriting guidelines in the mortgage business had become too lenient.

            "I would talk with people throughout the mortgage industry and the general consensus was that if you had a pulse, you could get a mortgage," she said. "The difference now is that you have to bring a little more to the table than just a pulse."

            Tyler Wood, a mortgage loan professional with the Bank of America in Macon, Ga. and the immediate past president of the Mortgage Bankers Association of Georgia, said he hopes that the federal government will allow the mortgage industry to police itself, and not step in and try to regulate it.

            "The massive amount of global investment in the American mortgage industry resulted in tremendous amounts of money becoming available for mortgage lending," Wood said. "Because there was so much money, underwriting guidelines became very lenient. Now everybody is paying for it. I hope that congress will give us, as an industry, the opportunity to clean up our own act."

            As pessimism pervades the subprime sector of mortgage lending, prospects for the conventional sector remain optimistic.

            "We really want people to understand that if you have good credit and above, there are plenty of good mortgage programs available," said Alana Avret, sales manager of the mortgage department of Synovus Mortgage in Statesboro. Synovus is the parent company of the Sea Island Bank.

            "For those with troubled credit, it is very difficult right now to get a mortgage," she said. "Many of those programs are gone and the companies that funded those loans are in financial trouble. But, again, that is a very small sector of the mortgage business."

            Jim Lanier is a mortgage loan officer with Farmers and Merchants Bank in Statesboro. He has been lending money to home buyers for over three decades.

            "The subprime financing angle is just dead in the water right now," he said. "The programs that we participate in are conforming so we really don't have any problems getting a mortgage for our clients if they qualify. There is ample funding available."

            "For those that have credit problems, with some hard work and diligence many can repair that damage and get into a conventional loan within a year or two."

            Even though the subprime market has reportedly ground to halt, local mortgage professionals say they are still very busy, and that their workload has not decreased.

            "The demand for home mortgages has remained steady in Statesboro," said Kelly Kahley, a loan officer with First Southern National Bank. "I am very busy. I just don't see Statesboro being as impacted by this as some other parts of the country."

            "Even though there has been a decrease in the number of loan programs being made available by lenders, it is still business as usual. With good or great credit, you can get a mortgage. With less than that, you may need to go to credit counseling and clean things up a bit."

            Busby said she hopes people understand that the mortgage industry as a whole is not in dire straits.

            "If you hear it enough, you start believing it," she said. "Rates have come down somewhat which is helping ease the rate of foreclosures in the market, and I believe that they will come down even more. Believe it or not, it is a good time to get a mortgage and to buy a home.”


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