Is it better to do business / refinance a townhouse with a small bank of a large national bank? There is a local bank that comes on the radio saying they have no sub prime mortgages for. Is it better to bank with this kind of bank?
Yes most local banks have bad loans and they will be active longer. But your money is safe in all banks up to $ 250,000 as they are FDIC insured.
Which bank to choose services depends on your needs. If you are worried about getting a mortgage, the bank you choose does not matter that much. The bank probably will not service the loans and if it is experiencing financial difficulties, housing loans are not affected. We have seen many banks collapsed and homeowners are not affected. For other services such as checking and other loans, local banks to provide services that large banks often overlooked. And if the deposits are insured by the FDIC, if a person opens a CD of 5 years and the bank fails, the FDIC generally will sell the assets and accounts, however, the acquiring bank is not required to honor the rate CD. They can return the principal or offer CD rates that is currently marketed by the acquiring bank. It is certainly a reflection of a well-managed bank that they stooped subprime loans, but I do not see how it will reward you, the customer.
Not necessarily. I think the worst has passed since the bank shake. We were originally funded by Wells Fargo, which have not sold our loan. We refinanced by U.S. Bank, which has been one of the few banks that did not need or want any bail money. They are bigger banks, so I think they have more power lending. Many small banks do not have much money to lend now, so they can be more strict with their approval requirements.
Posted on February 6, 2010.
