Bank Helps Locals Put Down Roots

(CBS)  With their private jets parked in airplane hangars and millions of dollars in "toxic" assets hurting homeowners, banks have been cast as one of the "bad guys" in the nation's recent economic troubles.

But one bank is putting its federal bailout money to good use, helping jumpstart the local economy and enabling people to buy homes.

Walla Wall Wash.-based Banner Bank has branches throughout the Northwest. And it's using $50 million of the $124 million in bailout money it received for a program it started in Portland, Ore., called the "Great Northwestern Home Rush."

Several of the bank's clients are builders, with hundreds of newly constructed homes going unsold for almost a year. The idea is to push qualified buyers back into the market.

By offering bargain-basement, 3-7/8 percent financing, Banner hopes to encourage potential buyers to get off the sidelines and purchase homes.

"I know it's been a bad rap for a while that banks aren't doing loans, banks aren't there for their customers, they aren't there for their community -- and we are!" Banner's Lenny Severs told CBS News correspondent Priya David in Part Two of the Early Show series, "Early Across America," which tells stories of hope amid the economic despair sweeping the nation.

The way companies such as AIG and Citigroup handle their money angers Severs. If the bigger banks acted the way a smaller one like his does, he says, the difference would be monumental. "If banks just sit on that money and don't do anything with it, it doesn't help anybody," Severs says.

When Banner Bank began the program March 7, it thought it would see 10 to 15 homes sold. Now, three weeks later, more than 60 homes in the area have been snatched up.

"It was like the floodgates opened," Severs said.

Those purchases are helping others, too, namely, the painters, carpenters and plumbers who've seen their projects decline.

"Today, we had some landscapers out doing grass and tomorrow we have a guy coming to build a fence," said David Brothers, a new homeowner. "So it's got us going out and spending money and it's putting other people to work who need that work. It seems to have a big ripple effect on the economy."

This week, Banner is expanding its program to other parts of the Northwest, and the company's CEO says he's gotten inquiries from other banks about the program.

Ken Gertz, a builder, calls the staff at Banner "the greatest guys on the planet" -- words you wouldn't hear most people use about bankers these days. But its contributions to the community, evident by all the "Sold" signs Gertz sees, make him hopeful about the impact the program is having on the area.

"The housing market is what brings the economy down," he said. "And it's what will bring the economy back."

[dreamteam092002]

If all banks did what Banner is doing, our nations economy would turn around. The collapse of the housing market was fed by unqualified buyers and irresponsible lenders. This program is neither. The homes they are offering this financing on are great prices and the buyers are well qualified. Purchasing a home leads to many secondary purchases that fuel the economy. This bank is making a difference in peoples lives and the economy. The builders can build again when they are able to sell some of the existing inventory. It was good to see a positie story and good to see CBS cover it.

[JohnDeCosta]

Banner Bank is a class act, and the new program was well organized and implemented. We participated, and worked around the clock to get our clients the opportunity to sell their excess inventory. The results speak for themselves. All anyone needed was a little assist with the rate and a lender that worked to assist the sellers move their homes. All of our sales went to extremely well qualified families. The sellers won, the buyers won, the bank won, and hopefully this is a start to getting things back to a sustainable market. Success is just preparation meeting opportunity. Our thanks to everyone at Banner for the opportunity to make a difference. Our thanks also to the builders who priced their homes to sell, and to the purchasers who will enjoy their new homes with low interest rates for a very long time.

[ctkaren]

At first, I applauded The Early Show's initiative to profile "bright spots in a gloomy economy," since building confidence in our system is so important to our recovery and the program's role as a national media outlet is also important in helping nurture that confidence in what it chooses to report on. However, I was completely turned off when the reporter in this story went for the cheap sound bite, with her question about AIG and Citigroup. I found this offensive for several reasons - first, it's time for the media in general to stop fanning the flames between Main Street and Wall Street, because whether we like it or not, America needs both the middle and upper classes (which they have come to represent) to recover. And, we should at least be able to count on national media outlets to get even the most basic facts straight. In this case, The Early Show reported that AIG is a bank, which it is clearly not - even my 12-year-old knows that from all the existing media coverage on AIG. If that reporter had done her homework, she would have also realized that, ironically, if it weren't for insurance companies like AIG, banks like Banner could not even open their doors, as they - like other businesses and individuals - need insurance to operate and take on "risks" (such as lending to homeowners and driving a car, respectively.) So please, Early Show reporters, continue to do these wonderful profiles, but don't taint them by going for the cheap and misguided sound bite - they don't need them!

[rosiepc]

Unfortunately the larger banks are timid, they are like lions with no courage. It'll be the small, it's wonderful life type banks, like Banner to take the lead in re-establishing the lending market & get the ball rolling and then the plan will work when the larger banks see that and then follow to make a greater impact in the market. That is the plan the President Obama has set forth.

[bird1117]

You're quite naive if you think this isn't self-serving for the bank. What CBS fails to mention is that buyers in this program can only choose from a list of pre-defined properties that Banner has to choose from. And, all the properties on the list are in developments financed by Banner. Therefore, if Banner doesn't find buyers for these properties, the builders will go into default and Banner will have to foreclose on them - then sell the properties at a steep discount anyway. Using this strategy, they at least get some good PR out of the deal.

Plus, during the story you hear the home buyer say "100% financing, how can you beat that...". 100% financing is exactly what got us into this housing mess in the first place. Programs like this will just prolong the definite collapse of housing in our country.

[miknv48]

I think what this bank has done gives us hope again. President Obama, should really take this into consideration, to help people all over the nation. They say they are in Orgeon and my question is how do all of the other people who are qualified buyers get a chance like this? Again, President Obama, No disrespect, but please pay attention to this video. This is and incredible Idea!! Good for Banner bank. Keep up the good work. Can people in NV. use your Bank if prequalified?