Community banks fueling real estate market growth
By Heather Sackett
The trend of the past few years of banks holding tight to their funds has passed, O’Neill said.
“There’s been a perception for a long time that banks aren’t lending money when they certainly are and not only to the affluent,” he said.
For the Telluride area market, it can still be difficult to get a conventional 30-year fixed-rate mortgage from one of the big banks for certain properties, like condos. But small community banks like Vectra and Alpine, with their intimate knowledge of the local housing market and personal relationships with customers, have been stepping in to fill the gap. Not many properties here fit into the box of conventional financing, said Kathy McJoynt, who works in executive banking and residential lending for Vectra Bank’s Telluride branch.
“Community banking and local banks have stepped up to some degree,” McJoynt said. “It allows us to bridge the gaps and allows (borrowers) to get into homes and then they can refinance. The bottom line is that there are loans out there for the community.”
A new program, started earlier this year at Alpine Bank, has created mortgage loans for those looking to borrow and buy in the area. Normally, small community banks package mortgages and sell them to larger banks. But if they don’t fit into a narrowly defined category, the large banks, which usually underwrite the small banks, might be hesitant to buy the package. Coupled with an ignorance of the idiosyncrasies of the Telluride area housing market, those big lenders might head for the hills.
Alpine Bank’s new program doesn’t package up those mortgages to send them to larger banks for scrutiny. Instead, it keeps the money local, and so far this year, Alpine has put more than $100 million in new mortgage loans into Colorado’s Western Slope, according to Alpine Bank’s Telluride Branch Manager Chris Maughan.
“We created a mortgage loan we hold on our books here,” Maughan said. “We developed this to address local borrowers’ needs.”
The program doesn’t mean that every loan will be approved, but it allows Alpine to evaluate each loan on its merits and each borrower individually.
“We look at each deal in-house,” Maughan said. “We have an intimate knowledge of the property and the borrower, and we can take a different approach in how we evaluate those.”
Alpine also has a home equity loan program for energy efficiency improvements to homes. The bank will loan up to $8,000 with no collateral for projects like new lighting, solar power or appliance upgrades.