Low-interest loans generate a lot of interest.
Atlanta banks were showered with phone calls Monday in response to the $65 million in home loans they have promised at low interest rates, mostly in black neighborhoods.
Most banks aren't taking applications yet, but they are taking calls.
"I have talked to at least 60 people today, and I have messages here to call another 150 people," said Charles Sweat, the new Southside loan officer for Citizens and Southern (C&S) Bank. "I didn't eat lunch Friday or today. I don't think anybody really expected the number of calls. I'm worried how long the money will last."
Officials at other banks and savings and loan associations say they also received many calls.
The low-interest loans were announced by nine lenders Friday in reaction to the outcry over "The Color of Money," a series of articles in The Atlanta Journal-Constitution. Based on lenders' statistics, the articles described how banks and savings and loans rarely made home loans in black neighborhoods, and also offer less access to bank facilities in black and integrated areas.
The bank programs were announced hurriedly to assuage politicians and black ministers, who threatened to call for a boycott.
In the haste, there have been some problems.
For example, Charles Sweat's phone at C&S is broken. When he is talking to one caller, he hears a "beep" when a second call comes in, but he can't answer the second call without hanging up on the first caller.
So, for many callers inquiring about the bank's $25 million in special home loans on Friday and Monday, the phone rang and rang and rang. Sweat said he hoped the phone would be fixed by today.
The bank programs vary, but all have lower interest rates than normal, more liberal credit standards, lower closing costs and no requirement of mortgage insurance. All of the programs are available only to new owner-occupants, not for refinancing.
C&S will start taking applications Monday for its $10 million in home-purchase loans and $15 million in home-improvement loans. The loans are available to applicants in any area, if their income is $35,000 or less. The chief office is at the West End branch, but inquiries are accepted at any branch.
First Atlanta will start taking applications for its $10 million program during new Saturday banking hours (9 a.m. to 1 p.m.) at four Southside branches: Campbellton Plaza, Greenbriar, Stewart-Lakewood and West End. The loans for home purchases and home improvements are available to borrowers with income of less than $30,000 in targeted working-class neighborhoods, mostly on the Southside.
Trust Company is taking applications now for its $10 million program at eight Southside branches, with new Saturday hours at several Southside locations. These loans for home purchases and home improvements are available only to borrowers in lower-income and working-class neighborhoods.
The Atlanta Mortgage Consortium, with nine participating lenders, plans to be gin taking applications for $20 million in loans June 20 through the individual institutions. They are Bank South, C&S, Citizens Trust Bank, First American Bank, First Atlanta, First Union Bank, Fulton Federal Savings and Loan, Georgia Federal Bank and Trust Company.
None of the programs has a racial requirement, although the targeted neighborhoods are predominantly black. At C&S, whose program includes all areas, Sweat said he has had many inquiries from whites as well as blacks.
"One white woman in Buckhead, a single woman, called, and it looks like she'll qualify," Sweat said. "I've had calls from all over the Southside, West Cobb, Jonesboro Road, even Dunwoody."
Although lenders are relaxing credit standards, they emphasize that they will not lend to borrowers they consider poor risks.
"The last thing we want to do is get a mortgager in trouble," said Jim Mynatt, first vice president of Trust Company. "I had a guy call me who said he had bad credit and his house was being foreclosed on, and could we help him. That's not the purpose of this program. I don't think our foreclosure ratio should be any higher here than on any other loans."Go to the next article or back to the Color of Money index or Power Reporting
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