Local banks back in the mortgage business

Bank sign on building

Remember these guys: the community banks that offer Christmas club plans and give you a yearly desk calendar as a thank-you for your business?

During the early 2000s, many got pushed out of the mortgage business by giant lenders such as Countrywide, Ameriquest and New Century Financial, which lured borrowers away with deals that were too good to be true.

Now, many of those bad lenders are gone -- bought out or broke -- and community banks are making a comeback.

Some obtain the money they use for home loans from investors, just like the big guys. And a few simply act as brokers as brokers for larger lenders.

Some obtain mortgage money the old-fashioned way -- from their depositors. They don't sell the loans but hold onto them, collecting and profiting from the monthly payments.

They emphasize personal service, low fees and, sometimes, surprisingly good rates. First Savings and Loan of Hegewisch, for example, is a small, southeast Chicago thrift that's offering some of the best mortgage rates in the city.

Don't hesitate to take advantage of any deals community banks are offering in on our extensive database of the best mortgage rates just because they're small and don't advertise much.

You can figure out the payments for any fixed-rate loan using our mortgage calculator.

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