what is the risk borrowing home loan from a small and new bank?
h.f. asked:
I am having a traditional loan application with a big bank. I just found a small bank in Florida, founded in 2004, is offering better rate and cost compared to those big famous banks. The small bank is member of FDIC. Somebody told me small bank may not follow federal regulations. How do I tell if a bank is a qualified home loan lender that follows all lending regulations? What is the risk borrowing home loan from a small bank?
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I am having a traditional loan application with a big bank. I just found a small bank in Florida, founded in 2004, is offering better rate and cost compared to those big famous banks. The small bank is member of FDIC. Somebody told me small bank may not follow federal regulations. How do I tell if a bank is a qualified home loan lender that follows all lending regulations? What is the risk borrowing home loan from a small bank?
February 3rd, 2009 at 3:27 am
There is no risk for you, you’re the borrower. As long as you get the money at the rate, terms and fees you understand.
February 5th, 2009 at 9:26 am
Unless you are borrowing on the i net you should know ALL there is to know about the bank… All banks a member of the FDIC all one must do if you are not in there city go to FDIC.GOV AND CHECK THEM OUT….. or call the banking commission…
February 7th, 2009 at 2:57 am
FDIC is great and all, but it has almost nothing to do with lending. FDIC means that they have a Federal Deposit Insurance Company protecting your deposits (checking, savings, CDs, IRAs, etc) in the case of the bank going belly up. If the bank ends up getting in trouble, they will sell your loan off to another bank or financial institution for the capital. This can happen in large banks as well as small banks, especially the way the economy is right now.
To test this small bank for their federal guidelines, when you walk in next time ask them where they have posted their Community Reinvestment Act public notice. If they look at you like they have to no idea what you are talking about, walk back out the door and don’t look back. If they have one, take a seat!!