Community Banks Have Some Advantages
More evidence suggests that small, community banks have the potential to fare well in the current market climate.
In the past, this blog has featured numerous articles about how these banks have certain advantages over their larger counterparts. In one post, we pointed out that the lower rates and faster processing times that these banks offer gives them an advantage in the eyes of borrowers.
According to a recent article on Housing Wire, many community banks believe that these advantages will serve them well in 2014.
“Community banks, I think, are best prepared and best equipped. They are uniquely positioned, and their market is well defined,” Christina Boyle, vice president and interim head of the Single-Family Sales and Relationship Management organization with Freddie Mac, told the news source. “They are not trying to be positioned in everything.”
Compared to large banks, which have been losing their share of the mortgage market as a result of falling refinancing activity, community banks have been focusing on local customers to shore up their own business. This, in turn, has allowed them to foster a sense of goodwill.
“Loan approvals and other key decisions are made locally by people who live in the community, have face-to-face relationships with their customers and understand local needs,” Stacy Mitchell, director of the community banking initiative at the Institute for Local Self-Reliance in Washington, D.C., told The Morning Call.
Thanks to technology like application processing software, these banks can offer efficient, convenient loan processes. In addition, risk management software allows them to better determine who is capable of carrying a loan.