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JIM MEENAN
South Bend Tribune Staff Writer
February 13, 2008
Since foreclosures
not high here, Bush program may not have much effect locally,
they say.
Local
lenders say President Bush's Project Lifeline will have little
effect on their lending practices.
The reason? Local
lenders at institutions such as Teachers Credit Union, Notre
Dame Federal Credit Union and 1st Source Bank are already
providing numerous lifelines on mortgage loans such that the
foreclosure rate in this area does not match the national
problem.
"We have very little foreclosures at the
credit union," said Leo Ditchcreek, president and chief
executive of Notre Dame Federal Credit Union. "We try to work
things out with the borrower.
"Anything we can
do for the consumer, if we can work out a deal, is not only
much better for the consumer but the lender.
"The last
thing I want to do is hold property I can't sell, or if I do
sell it, sell it at an extreme loss."
Bush announced a
program Tuesday giving borrowers delinquent on mortgage loans
a 30-day pause on the process while lender and borrower could
try to work something out.
But such efforts have been
ongoing for sometime locally.
"We work with them as
long as they have difficulties," said Rick Nettesheim,
executive vice president and chief operating officer at
Teachers Credit Union. "If they are in delinquent status, our
initial reaction is to work with them."
Both Ditchcreek
and Nettesheim said their institutions could count on one hand
the number of foreclosures they had in 2007.
"The last
thing we want to do is foreclose," Nettesheim said. "Nobody
wins in that situation."
In fact, he adds, at the first
sign of difficulties, TCU has programs in place to work with
the consumer.
And it's not that TCU is not doing some
lending. Last year it loaned more than $84 million for
mortgages to homeowners in the area.
Both institutions
said another way they prevent foreclosures is not signing up
people to loans they cannot afford.
"When we make the
loans upfront, we under write it so the individual can afford
the home and we don't put people into loans they can't
afford," Nettesheim said. "It's not good for them and not good
for the community."
Lending institutions get stuck
with the taxes themselves in a foreclosure situation, making
it difficult for the lender to come out
ahead.
Ditchcreek said the national problem is "more a
function of third party lenders which were doing some things
they should not have done."
"They are not doing
old-fashioned banking of lending based on capacity, collateral
and credit history," he said. "It's nothing scientific or
earth-shattering."
Ditchcreek noted his institution has
had to turn some people away simply because they could not
afford the loan they sought.
"In most cases, the
capacity (to afford the loan) was not there," he said.
Not that people in this area have not faced trying
situations such as job loss, divorce or unexpected health
problems.
"We take every situation differently and
treat it uniquely and work with them to find an amenable
situation," Ditchcreek said.
"The last resort is
foreclosure."
Jim Seitz, vice president of consumer
banking for 1st Source Bank in South Bend, echoed Ditchcreek's
and Nettesheim's comments.
"We have programs in place
that when one of our customers goes past due more than 45
days, we start to have conversations with them," he said.
1st Source Bank never got into the subprime lending
business, he added. "Our delinquency is a more manageable
number so we can give personalized service and talk to
customers about what their alternatives actually are," he
said.
"Our customers are not a number."
JIM MEENAN
Tribune Staff Writer
February 13, 2008
