New bank emphasizes homeownership ed

October 3, 2008 4:23:38 PM PDT
There's new hope for a new generation of homeowners in one Chicago neighborhood. A newly opened bank branch in the city's Brighton Park neighborhood is placing more emphasis on the steps taken before a customer gets a mortgage or a loan. Lenders are being more careful about their loans. It may make it more difficult for homeowners looking to refinance in the short-term. But, in the long-term, the hope is to put homeowners in mortgages they can afford and add stability to the market.

Amid an economic downturn and bank failures, the celebration of a bank's expansion. Friday, Fifth Third Bank, 4726 S. Kedzie, officially opened its first loan-only office in the Chicago area in Brighton Park. The bank's director of mortgage lending says this office, where most of the loan officers are bilingual, will specialize in educating and preparing customers for responsible mortgages and homeownership.

"This is in their best interest. If it is, fantastic. If it isn't, let's sit down and explain to them why this is not such a great idea. Or maybe they're just not ready yet for home ownership. And if they're not, what can we do to put them on that path?" said Howard Ackerman, Fifth Third Bank.

Those explanations can even take place in their neighborhood. Fifth Third has a bus for that offers loan information, credit scores and loan applications.

Ackerman says the failure of some lenders to provide enough preparation and obtain enough information, like income verification, created the mortgage crisis and ultimately the global financial crisis.

"It's clear that there were a lot of predatory lenders, irresponsible lenders, taking advantage of consumers," said Ackerman.

Brighton Park Neighborhood Council was among several neighborhood organizations to receive a donation from Fifth Third Bank Friday. The council offers HUD-certified housing counseling a few blocks from the new loan office.

Housing specialist Genaro Bucio says he sees three homeowners a day trying to avoid foreclosure. He says many of his clients wouldn't have been in this situation if they'd had better homeownership education.

"We're doing the best we can to keep everything in their homes," said Genaro Bucio, Brighton Park Neighborhood Council.

He says they struggle to get their clients better terms, but often their clients get additional cash income, so on paper the clients don't look like good candidates for a loan.

"Even if we were to drop the percentages, many of them don't even qualify for the 6 percent. That's the only alternative to losing your home," said Bucio.

The council says the combination of tougher credit standards, job cuts and the erosion of home values put their clients in bad positions. Most don't even return to fight the foreclosures.

The good news: the council says about 75 percent of their clients who fight save their homes. Moving forward those entering into mortgages will not only be better screened but hopefully have better knowledge of their terms.


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