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Are your home-loan chances better at a smaller bank?
Source: MSN Real Estate News
Hurricane Ike barreled through Texas in 2008, leaving homes on low-lying Galveston Island sitting in as much as 10 feet of water. When evacuated residents were allowed to come back 10 days later, they found four of Galveston's community banks there ahead of them, ready to loan money to repair or rebuild homes.
"Big megabanks" would not have touched the mess, says Jimmy Rasmussen, president of HomeTown Bank, one of the four local banks. The banks made 90-day loans at the then-low rate of 5%, so homeowners could get cash while waiting for insurance checks to come through.
In the month after the storm, the four banks loaned out $40 million using standard mortgage applications. But lenders did bend the rules in some instances, if they were satisfied that a borrower would repay the loan. That meant occasionally waiving strict requirements on credit scores, loan-to-value requirements or even debt-to-income ratios.
"We were looking at homes that were destroyed, or had 7 feet of water in them. If you were going to get them appraised, they were not going to be worth much money," Rasmussen says. "A lot of it was unsecured money to our customers, where we ... more

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