A Conversation With ... Sherry Burnett

Springfield First Community bank celebrates its five-year anniversary next month and opened its second location –  the SFC Home Loan Center – in August. Why the need now?
We thought it was a great spot, being by some of the [real estate] agents, being on Primrose. It’s a prime location for us. At the time, refinances were going on, we had a need.

It was a good opportunity that came up and we decided to take it. It’s going well so far. People are aware if this space, and we’re getting to meet lots of agents being so close to real estate offices.

According to the Federal Deposit Insurance Corp. report ending June 30, Springfield First Community Bank loaned or leased $262 million, up 21 percent from $215 million in June 2012. Why are loans up, and what type is the bank approving most often?

This year has been great. The volume has been better than last year. We have really good people, really good commercial lenders. I sell residential, but the bank does a lot of commercial loans. Our lenders have a lot of ties, they know a lot of people and have a lot of experience. Sometimes it really is all about who you know. Right now, the bank is doing more commercial business than residential.  

How would you characterize the current residential lending atmosphere?
Right now, we are back to where we were 20 years ago – everything is very traditional. You have to have a job, you have to have good credit, you have to have these things to get a loan. We are giving loans all the time, but you have to have income. Before, they were doing stated income and basically giving loans to anybody. I know it sounds simple, but now you actually have to qualify for a loan. It’s back to basics, back to the core standards.  Compliance wise, it’s a lot more difficult for us. There are a lot more steps, a lot more verification we have to do before getting a loan through. We do more work for less loans.

How have rising interest rates affected the residential loan market?
In July, the rates went up. Rates went up quick and it scared a lot of people. The refinances pretty much stopped, mostly because everybody has already refinanced. We got down to 3 percent on a 30-year fixed. The people who hadn’t, it got them off the fence. People are thinking, if they are going to buy a house, they better do it now while rates are lower. Somebody who could qualify for a certain loan at 3 percent may not qualify at 4.5 percent. Locally, I’m hearing inventory is low. There are not a lot of houses out there to choose from, but there are a lot of people looking. That’s good, it means we are transitioning into a seller’s market. It’s a good time to put your house on the market.

What problems are you seeing most often as the market continues to rebound?
You have to have credit in order to get credit. If somebody is lending you that much money to buy a house, they have to make sure you can repay it. You have to have some sort of history to get the credit. Good history, not just history. One of the things we are seeing a lot right now is people who have filed bankruptcy or have had a short sale because of the housing market and foreclosures. They can’t just turn around  and get another house. There are time frames for different programs. Some, you have to wait two to three years; with a conventional loan it can be anywhere from four to seven years.

Short sales are viewed the same as a foreclosures right now. A few years ago, nobody even knew what a short sale was. Now, you see it all the time. People are trying to build back up now, climb back out. The market may be rebounding, but it takes time to clear that credit and get everything back on track.