Springfield-area banks buck national foreclosure trend

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While the number of foreclosures nationally has risen, many area bankers describe the increases around the Ozarks as noticeable, but low.|ret||ret||tab|

Kevin Bell, vice president of Guaranty Federal Savings Bank, said the raw number of foreclosures was something less than 10, "which to us is a lot," and noted that as a percentage the number of foreclosures for Guaranty Federal had nearly doubled compared to this time last year.|ret||ret||tab|

Great Southern Bank and State Bank of Southwest Missouri haven't been hit hard by the foreclosure bug, executives say.|ret||ret||tab|

"Great Southern Bank, has seen no change in the quality or performance of our residential portfolio," said Kim Warren, assistant vice president of residential lending at Great Southern Bank.|ret||ret||tab|

Roger Terrill, executive vice president at State Bank, said he has noted the increase in foreclosures both nationally and locally, but adds that so far his organization has been spared.|ret||ret||tab|

"As an industry, yes," Terrill said of the upward trend in foreclosures. "Us personally here at the bank, no." |ret||ret||tab|

According to Terrill the last foreclosure occurred about five years ago for State Bank.|ret||ret||tab|

Bell attributes the rising number of foreclosures to the overall state of the economy and high consumer debt especially credit card usage. |ret||ret||tab|

"People who were accustomed to charge card debt have basically over-extended themselves," Bell said. "It takes them right over the edge."|ret||ret||tab|

"The home is one of the last things to go," Bell said of those suffering with a debt load beyond their means.|ret||ret||tab|

"In past years they were able to find ways to salvage the house, and this year, for whatever reason, they're not," Bell added.|ret||ret||tab|

While Bell believes the increase stems from an intemperate use of credit cards, he points out that one element alone can't explain the increase. |ret||ret||tab|

"You can't just peg it to one factor, there are other factors driving it," Bell said adding that the nation's overall economic health and rising unemployment rate also play a role.|ret||ret||tab|

He also added that the increase in foreclosures isn't tied to a particular price range, saying. |ret||ret||tab|

"It's across the board higher priced homes and lower, as well," he said.|ret||ret||tab|

Like many banks, Bell said Guaranty Federal tries to minimize risk in making loans.|ret||ret||tab|

Bell notes that in this one year, his bank has seen more foreclosures than in "probably the last 10. We've always prided ourselves in not taking too may risks in the lending area."|ret||ret||tab|

He also noted that his organization had not incurred any heavy losses and emphasized that delinquency rates on loans from his bank "are pretty low."|ret||ret||tab|

Terrill attributed the increase to the tepid state of the national economy.|ret||ret||tab|

"The economy in general is making it go up," Terrill. |ret||ret||tab|

He also reiterated the need for consumers to monitor their credit card usage. |ret||ret||tab|

"All that is symptomatic of poor underwriting, or lack of foresight, on the lender's part. People have to have certain reserves and the ability to work through tough times," Terrill said.|ret||ret||tab|

He also pointed out that those already carrying high debt loads before purchasing a home will only have more problems in the future. |ret||ret||tab|

"If they're marginal in good times, it's kind of hard to think they can make those payments in bad times," Terrill said.|ret||ret||tab|

"We try to look ahead and if a person is marginal in their cash flow it's reasonable to assume that when things get more tight they're going to have a more difficult time.|ret||ret||tab|

"You don't do anyone any favors by putting them into that kind of situation. Nobody benefits from a foreclosure, either the bank or the borrower."|ret||ret||tab|

He also noted that a foreclosure is an option of last resort.|ret||ret||tab|

"You don't want to pull the string on someone and foreclose because they have a three-month problem," Terrill said.|ret||ret||tab|

He also noted that often rather than pursue a foreclosure, which is an involuntary legal way of taking back the property, the bank and property owner might agree to a "deed in lieu of foreclosure."|ret||ret||tab|

Terrill described the procedure as very similar to a foreclosure, except it's a "kinder and gentler way of doing it."|ret||ret||tab|

He also said that a deed in lieu might create less of a negative impact on a person's credit history though it would still become an issue when seeking financing in the future.|ret||ret||tab|

"It doesn't absolutely preclude them from getting a loan, but it certainly is a factor," Terrill said.|ret||ret||tab|

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