Local Lenders Have Eye for Good Bollowers

Delinquency and foreclose rates are significantly lower for borrowers with credit scores below 660 when they get their mortgage from a local community lender, according to research by Stephanie Moulton, an assistant professor at Ohio State University who specializes in low-income housing policies and programs. Local lender tend to place more weight on factors other than credit score when assessing loan applications, Moulton says. They look at how long applicants have been with their employers and whether they make regular deposits into savings accounts, among other factors. "This kind of information may give a more complete picture of whether a person can really afford a mortgage, particularly for higher-risk borrowers," Moulton says. Local Lenders are also more likely to have a relationship with the borrower through checking and saving accounts.