“That the economy is showing only modest improvement in the Midwest and in conservative Wisconsin is typical of this sector of the country, which was slow to move into the recent recession and is being slow to move out of it,” said Greg Garton, assistant vice president/ branch manager/loan officer of the Great Midwest Bank office in Chilton.
“When in Wisconsin housing prices were going up 5 percent annually, in other regions prices were going up 25 percent every year. Common sense tells you going up 25 percent each year is not realistic. Then housing prices went down 25 percent and then 65 percent. Housing prices in Milwaukee and Green Bay have picked up somewhat but the Valley and this area is a bit slower but better than it was a few years ago,” said Garton.
Today it is a buyer’s market. Prices have been low due to foreclosures and short sales. Currently a 15 year mortgage interest rate is 2.75 percent and a 30 year mortgage is 3.50 percent, the lowest rate in 65 years. “It is a great time to buy a home if your credit is good and you can make a down payment. One would be getting a good price at a good rate. But job security is still a problem and one does not want a big debt with a house payment,” said Garton. A worst case scenario is when a spouse is laid off, creating a tight situation with respect to the house debt. Stress enters the picture and impacts the marriage and eventually the couple loses the house.
In light of job insecurity, it could be risky for banks to accept a mortgage without resources backing it up. Making a solid down payment is very crucial these days. Garton said that job insecurity became severe in the manufacturing industry and named Tecumseh Products in New Holstein as an example of a local heavy employer that had to fold. In Wisconsin the manufacturing field got clobbered the most.
Today the food line industry appears to be lively because they are feeding the world, he said.
Lack of consumer confidence
Garton blames Congress’ indecision for the people’s lack of consumer confidence. One does not know from week to week what they are going to do with health care, minimum wage and other benefits. People won’t make decisions right away without guidance from Washington, he said.
In the distant past mortgage applicants had good credit, a good job and were capable of making a down payment, then in 2005 attitudes on home mortgages went liberal. People thought the value of property would continue to go up, and never thought the value would go down. Many thought they were entitled to a home loan where a down payment and bad credit were ignored. So when a problem occurred they quit or walked away.
At Great Midwest Bank, local decisions are made on loans. Great Midwest Bank has a loan committee. “I underwrite part of the loan and when the borrower talks to me that person’s credit, income and payments are looked at and then the committee reviews it. If a person fails to make payments on time, that person’s credit score will go down. One’s credit score also affects car and life insurance Nowadays how
Great Midwest Bank’s friendly staff members are (from left) Tina Karls, Heather Trowbridge, Greg Garton, Briana Reilly and Carla Biese. Not pictured is Donna Bancroft.
one handles credit is a big thing. If you don’t meet those basic numbers you are dead in the water,” Garton said.
Lots of changes in the banking industry are here and coming down the road, said Garton who added that when factoring in the global economy and technology, the banking industry is being driven by much of that. On the local level, mobile banking, bill paying, electronic transfers, and several other electronic banking services are appealing to the younger generation.
Some things are not changing fast enough, an example being interest rates on savings accounts. “While they have been down for some time, they are due to
Stephen Groessel photo
come up a little but not real fast,” Garton said. “They are so low now, it is ridiculous. A half a percent in one’s savings account will not get you anywhere. With health care not any cheaper and social security being tight, it is not helping seniors at all. There are serious decisions to be made in Washington. They talk a lot but no decisions are made on the basics.”
Great Midwest Bank is a customer owned financial institution. The fourth generation is now running the company. The Chilton branch has six employees.
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