The wisdom of seeking out and utilizing local banks when buying a home continues to be confirmed by news reports as larger banks continue to struggle with the consequences of their own destructive business practices. The bottom line: lawsuits against the big banks could cost them $300 billion, which would weaken their ability to lend and subsequently threaten the recovery of the real estate market.
Although the large national banks like Bank of America, JP Morgan Chase, Wells Fargo, and Citigroup have already paid out billions to settle lawsuits that resulted from bundling and selling shoddy mortgage securities, illegal foreclosures, and mortgage fraud; the litigation continues, according to a recent article in the New York Times.
“The banks are battling on three fronts: with prosecutors who accuse them of fraud, with regulators who claim that they duped investors into buying bad mortgage securities, and with investors seeking to force them to buy back the soured loans,” the Times reported.
What’s more, as I have mentioned in previous blog posts, local banks are easier to work with and care more about how their business practices affect their communities. By giving your mortgage business to local banks, you are contributing to a stronger local economy whereas a large national banks put the local and national economy at risk, leaving neighborhoods to deteriorate and the nation to suffer.
When do you read headlines regarding local banks like:
- HSBC Expected to Settle Case on Laundering for $1.9 Billion
- Mortgage Catch Pushes Widows Into Foreclosure
- U.S. Sues Bank of America for $1 Billion Over ‘Brazen’ Fraud
- U.S. Sues Wells Fargo, Accusing It of Lying About Mortgages
- New York Sues Credit Suisse Over Mortgages
- 3 Men Arrested in Rate-Rigging Inquiry
If you were to have repairs done to your home, you wouldn’t hire a contractor with a reputation for ripping his past customers off or engaging in criminal behavior. So it makes no sense to do business with a bank that was responsible for ripping off millions and who have repeatedly been accused of criminal behavior.
If you are planning on buying a home in the Pioneer Valley, call Michael Seward at 413-531-7129 for a list of local banks.