Webster Bank’s Patricia Placencia is a vice president and sales manager for consumer finance. She recently spoke to PBN residential real estate and the homeowner’s forum hosted by the bank later this month.
PBN: How would Webster Bank describe residential real estate sales in 2012; slow, average or like hotcakes?
PLACENCIA:Compared to 2011, definitely “like hotcakes.” Since the beginning of the year, Webster has received approximately 4,300 applications totaling more than $1 billion. At this time last year, we’d received 1,700 applications totaling approximately $460 million. In Rhode Island alone, we have increased our sales force by more than four-fold since the beginning of the year. We’ve also been busy implementing an extensive partnership and education program with local real estate agents – we’re reaching out and helping them understand not only what Webster offers homebuyers, but also what homebuyers need to know before they begin the mortgage application process.
PBN: Have people taken advantage of the low interest rates, and why or why not?
PLACENCIA: Indeed they have. Of the 4,300 applications totaling more than $1 billion I mentioned, we have already funded approximately 2,200 of them, totaling more than $520 million. By comparison, we had funded more than 1,100 applications totaling $280 million at this time a year ago. We’re in a time when interest rates are historically low, and home prices are lower than they have been in more than a decade. At the same time, rental costs are rising. Many who have never purchased a home before are discovering that home ownership can be an affordable alternative to renting. We also have many current homeowners who are either looking to refinance at the new low rates or purchase a second property.
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PBN: What other bargains or special offers are available?
PLACENCIA: At our Saturday, June 9 Homebuyer Open House, we’re offering $250 off closing costs and a waiver on the credit report fee on all approved applications. Those events will take place at three Rhode Island Webster branches – 1215 Park Ave. in Cranston, 2100 Warwick Ave. in Warwick, and 265 Newport Ave. in Pawtucket – between 11 a.m. and 2 p.m.
For those who can’t make the event, Webster has a dozen new and six revised mortgage products that are available whenever you have time to talk with one of our mortgage bankers. In particular, our own HOPE program (Home Ownership Possibilities for Everyone) has been expanded to cover 15 Rhode Island cities and towns. HOPE can be used to purchase or refinance a home, and is not restricted to first-time homebuyers. HOPE mortgages are offered lower than prime, require 3% down, and there’s no mortgage insurance requirement. We’ll also credit the borrower back for the appraisal and credit report fee, which is a savings of about $400. There are income limits, and those vary by the city or town.
PBN: What do you observe is the most common problem for a customer to buy a residential house?
PLACENCIA: Lack of information – about credit worthiness/credit scoring, the application process, the costs of owning a home versus renting one, the pros and cons of mortgage interest, how much house they really can afford to buy without getting in over their heads. And that’s just to name a few. That’s why we’ve made it a priority to work with both our customers and our partners in the real estate world to arm our potential homebuyers with as much knowledge as possible before they begin the process.
PBN: Based on what you have seen over the last few years, what are your observations on the area’s housing market?
PLACENCIA: Home sales have steadily been rising, though not quite as quickly in Rhode Island as the neighboring states of Massachusetts and Connecticut. This is primarily due to Rhode Island’s higher rate of unemployment. Once Rhode Island’s unemployment numbers sink below 10 percent, we should start to see a more meaningful lift in home sales, which should in turn create a lift in home prices. For those looking to purchase or refinance this year, the good news is that the Federal Reserve is committed to keeping mortgage rates low until 2013. That being said, there’s no guarantee that they will, as any number of factors could cause the Fed to change the policy.
