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Published October 13, 2007 05:37 pm - Relatively low interest rates are one reason local banking professionals say Cullman’s real estate market remains strong. REAL ESTATE: Credit spigot still open By Karen Williamson The Cullman Times Relatively low interest rates are one reason local banking professionals say Cullman’s real estate market remains strong.
“The market has gotten stronger. It’s the safest investment out there,” said Pat Moody, president of The Mortgage Center. “Rates are even lower right now than six months ago,” he said. According to Moody, three years ago rates were as low as 5 percent. But low 6s are excellent, said Moody whose traditional 30-year fixed mortgage loan rate is around 6.25 percent. “Rates are not the problem,” he said. The problem is what Moody calls “exotic mortgages” — the adjustable-rate or interest-only mortgages that have been so popular over the last couple of years. Nationally, 20 percent of mortgages in the United States have been subprime, loans with higher interest rates for people with poor credit histories. “People were buying more house than they could afford,” he said. “In our market, we have just not seen that type of mortgage being very popular.” Whether it is a bank or a mortgage lender, most loans are then sold to a secondary market; however, a couple of banks in the Cullman area do not sell loans like First Federal. “If you go into a bank, they are going to do the exact same thing we are doing,” said Moody. “We get approval through a lending source we have.” Moody said his company has seen some foreclosures, but they were due more to “extenuating circumstances” like a job loss, a medical problem or a divorce. Cullman Savings Bank Executive Vice President Alan Wood said he has seen a steady volume of loan applicants coming in. “We’ve not really seen the effects of subprime lending at our bank,” he said. “We try to stay in the primary market.” Wood said his bank has not seen any increase in home foreclosures. “Right now, we have none,” he said. 
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