Crescent-News.com - Is your credit good or not?

By HEATHER BAUGHMAN

Northwest Ohio appears to be going in a different direction than some national trends. And that's positive news.

The credit crisis that has plagued much of the country over the past year and has led to trouble for some financial institutions has mostly missed northwest Ohio, according to local financial institutions that remain positive about their customers and their lending practices.

"The national picture might seem bad, but our delinquencies are real low, less than 1 percent," said Henry County Bank mortgage loan officer Tim Okuley.

That is a significant difference from the national home equity loan delinquency rate, as reported recently by the American Bankers Association. In an April report, the ABA stated home equity loan delinquencies increased nearly half a percent to 2.39 percent in the fourth quarter of 2007 from 1.92 percent during the same period a year ago.

According to the ABA's Consumer Credit Delinquency Bulletin, overall consumer credit delinquencies in the fourth quarter of 2007 reached their highest levels since 1992.

The State Bank and Trust Co., headquartered in Defiance, reported a different story.

"We have been fortunate, in contrast to many other financial institutions, in that our approach and lending philosophy have resulted in no significant default or delinquency increases," said consumer lending manager Chris Poston, noting that the bank "did not (and does not) partake in the aggressive lending practices of some other financial institutions nationally."

James Chessen, ABA chief economist, said, "The rise in consumer credit delinquencies is consistent with a rapidly slowing economy. Stress in the housing market still dominates the story but it's a broader tale of an overall weak economy."

Chessen predicted that delinquencies nationally would continue to rise during the first half of 2008.

"No relief for consumers is in sight as food and gas prices remain stubbornly high and income growth is anemic," Chessen said.

Yet northwest Ohio appears to be beating those statistics, but not by tightening the reigns or changing lending practices. Instead, the rules of yesterday are working just as well today, local officials say.

"I don't think our guidelines (for loans) are too stringent," Okuley said. In fact, the guidelines for lending at the Henry County Bank "have been the same for the past 10 years."

The main difference between its banking practices and that of some of the big lending institutions that are now faltering: "We don't have 100 percent financing," Okuley said. Instead, homeowners seeking a home equity loan at the Henry County Bank are only approved for a smaller percentage of what their house is worth.

When considering a loan, Poston said the State Bank takes a "consultative approach to lending to understand the client and not just the numbers," such as credit scores, debt to income, loan to value and length of employment.

The lending staff at the State Bank and other local financial institutions take a slightly different approach to client relations and lending.

"We believe that we work closely with our clients to find solutions that are beneficial to the bank, but more importantly, (to) the client," Poston said. "Our perception is that many banks nationally are simply interested in growing numbers, as opposed to our approach of being a financial services consultant with our clients."

Before walking in the doors of the Henry County Bank, Okuley said most people already know the outcome. Most of the people coming in are approved for the loans, he said. Denials are "real sporadic. Usually they know if (they'll be approved) when they come in."

For customers who do not qualify for a loan, Poston said there is still hope. "We sponsor a number of home ownership seminars and workshops that help our clients and communities (become) aware of current and emerging trends in home buying and home equity."