Aaron Blevins, Reporter-Times
ablevins@reportert.com
Although foreclosures in Morgan County have increased from 2007, two local banks have added just a few to their books recently, according to their presidents.
Dan Moore of Home Bank said he believes his bank has four homes in the process of foreclosure out of 3,500 mortgages. That statistic, combined with no automobiles the bank has repossessed, has lead Moore to thinking of recovery.
"I think (the economic situation's) greatly improved," he said Monday, adding that the worst of the recession hit two years ago. "Now I don't know if that's the case with everybody."
Moore said the bank has gotten some rental properties back, however. He said those properties underwent renovations and that all but one have a tenant.
"That strategy's worked out really well for us," Moore said.
Citizens Bank President Lynn Gordon said the bank has dealt with four or five foreclosures in recent months. Considering Citizens has seen an increase in bankruptcy notices and delinquency has been more prominent in single-family mortgage loans, he said he isn't sure the economy has done an about-face.
"There is some buying activity, which is encouraging," Gordon said.
While construction loans are scarce, the $8,000 first-time homebuyer tax credit has prompted some residents to pay their local bank a visit, he said. The purchase of existing homes has increased for Citizens as a result, he said.
"We're pleased with where we're at, given all the difficulties of the national economy," Gordon said Thursday.
Both presidents said their banks have been busy. Residents have been refinancing their mortgages given that interest rates are at historic lows, Moore said.
"That has stimulated a lot of people to refinance their loans and lower their monthly payments," he said, adding that refinancing to cut years off a mortgage is a "smart move."
Gordon said his bank has had a similar increase.
"Our mortgage department - they're just very busy with refinancing," he said.
Gordon and Moore also said the banks are still helping residents with their mortgages if they are having trouble making payments.
"We're trying to follow the Fannie Mae and Freddie Mac recommendations," Gordon said.
He said the guidelines were recently released and that the bank is analyzing those recommendations. Gordon said any hardship request application filled out at the bank is submitted to Fannie and Freddie.
Moore said Home Bank offers payment deferments and re-amortization, or restructuring of debt, among other things.
"We're very proactive in working with people," he said.
Getting foreclosures off of banks' books and preventing further foreclosures will be instrumental in the recovery, Moore said. He said doing so would put supply and demand in balance, at least locally.
"It's distorting the value of the marketplace," he said.
When new construction permits begin to increase, residents will see the sun break through the clouds, he said.
"That's going to be the last thing to come back," Moore said.