A banker speaks
Jim Wayman
Tuesday, May 6, 2008
WE HAVE ALL HEARD about the subprime mortgage problem in the news. It is touching many families as they helplessly watch their mortgage payments increase beyond their ability to pay and the values of their homes decrease below their loan balances. Lenders who failed to adequately qualify their borrowers for mortgages that clearly did not fit their situation have largely caused this unfortunate situation.
In addition, the large banks and investment firms that purchased these risky mortgage securities are now feeling the pain. Such firms are now incurring huge losses. As these problems appear in the news, one rightly begins to wonder about the financial condition of the banks right here in Emporia. Are all banks losing money? Is my bank safe? Should I be concerned? You will find comfort in knowing that as a rule community bankers are not participants in the greed that has been evident. First of all, we as community bankers live in the same community and frequently see and interact with our clients. We make sure we qualify our borrowers for the right loan to fit their needs. Second, community banks are weathering the credit storm because they are well run, highly capitalized and among the most highly regulated financial institutions in the country. Please don’t automatically consider the local community banks the same as the commission-driven mortgage brokers or the big nation-wide banks and investment firms that you are hearing about. Community banks survive and thrive by sticking with the basics — serving the members of our community in a safe and sound way.
Jim Wayman
president
ESB Financial