TAHLEQUAH — While reports about the housing market over the past couple of years have lamented lending practices that contributed to a nationwide recession, professionals involved with housing locally say their business has remained stable.

A recent survey by CoreLogic, a business data company, found Oklahoma has the lowest percentage of people who owe more than their houses are worth, according to the Associated Press. Only 5.9 percent of Sooner homeowners, or 23,724 mortgage holders out of a record 402,187, have negative equity. The national average is 23.7 percent.

CoreLogic’s survey said the state with the next lowest rate of negative equity was New York, at 7 percent, followed by Montana, Pennsylvania and North Dakota. Nevada had the highest negative equity rate by far, at 69.9 percent of all homes.

Local lenders said while bankers in other parts of the country wrote loans for more than the houses were worth, local loans have been more realistic.

“We did not make and handle loans that were not prudent,” said Gary Chapman, chairman and CEO of the Bank of Cherokee County. “We made, and continue to make, smart home loans.”

For example, if a house was appraised at $100,000, it would be unwise for a banker to lend the buyer $120,000 on the purchase.

“Right away you have a problem loan,” if that were the case, Chapman said.  Many banks resell the loan to the secondary market. Since those bankers know the papers will change hands, they may not be as careful in ensuring the buyer has the resources to repay the loans, he said.

“We do not sell our mortgages. We keep our mortgages here,” he said.

Customers have the opportunity to visit and keep in touch with their loan officer at the bank. They can come in to their local bank branch and make payments.

“You won’t be calling someone in California, New Jersey, or even Switzerland,” Chapman said.

That’s often the case when a loan has been purchased in the secondary market. For qualified buyers, it doesn’t take long to get a loan approved and a transaction made locally, Chapman said. It could happen in about three weeks.

“We’ll make the decision right away. We’ll go look at the house ourselves,” he said. “Then it simply takes what time it takes to do the abstracting and the title work.”

Buyers should examine their mortgage papers carefully and know the content, he suggested.

“Does it have a prepayment penalty? Could you make two payments a month, one on the first and one on the 15th?” he said. “Ours is a standard mortgage form. There’s no prepayment penalty.”

Chapman, a veteran local banker, doesn’t think the market here has changed much in the past five years.

“I really don’t think it’s any different. Our loan policies were the same then as they are now. The government has made it more difficult for people to borrow, with more regulations. “We’re probably one of the best places for any downturn in the economy not to affect us,” he said.

Linda Pippin of Charter Mortgage Group agrees.

“I’ve said that for awhile,” she said when hearing the survey results. “We didn’t have the inflated market they did in many parts of the country. It’s really good for people who have their credit taken care of and have jobs.”

One type of financing utilized heavily in Cherokee County is Section 184, which provides a source of funding for American Indian homebuyers.

“We have so many CDIB holders, and it’s only 2.8 percent down,” she said.

That’s less than other financing modes.

But buyers may not qualify for as large a loan as they could have in the days of looser lending policies.

“A few years ago, the lenders could loan a 55 to 60 percent debt to income ratio, and that’s unheard of now,” Pippin said.

The ratio today is usually 45 to 48 percent in conventional and rural development mortgages. For the Native American loans, it’s about 41 percent.  Those who qualify can get into a new home fairly rapidly. Pippin said underwriting approval usually comes in about five days on conventional loans. For the Section 184 loans, if they need to be shipped to Washington, D.C., or Denver for approval, the underwriting process can take about three weeks.

“With rural development, you can get in front of an underwriter in three to five days,” Pippin said.

For homebuyers, a little patience pays off, she said. During the process, it’s important to keep in contact with your Realtor and your lender, she said. If time goes by and you haven’t heard about your loan, call and check in.

“I try to call customers even if there’s nothing to tell them,” Pippin said.

She checks with the underwriters and finds how many files are ahead of that customer’s, and is able to give buyers an estimate of when their loan might be approved.

Pippin also said buyers should have all their documentation prepared to expedite the loan process.

“The secondary market is so crazy. It doesn’t take anything at face value,” she said. “You have to verify everything in writing — your pay stubs, your income verification.”

According to the AP, the national rate was even with this time in 2009, said Mark Fleming, chief economist at Santa Ana, Calif.-based CoreLogic.

“The two most important triggers of default, negative equity and unemployment, have stabilized over the last six months,” he said in a written statement. “As house prices grow again and borrowers pay down their mortgage debt, negative equity levels will begin to diminish. The typical underwater borrower is likely to regain their lost equity over the next five to seven years.”

The report was based on data from 47 million mortgages representing 85 percent of all home loans. Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia and Wyoming were not included in the survey.

Coming Friday

Realtors offer tips for buyers and sellers in today’s economic climate.

What you said

Most local homeowners believe their property has appreciated in value, despite falling prices in other parts of the country, according to an online, nonscientific poll conducted by the Press. Asked to describe themselves, following a recent survey which shows Oklahoma has the lowest percentage of people who owe more on their homes than the home is worth, they responded in this way:

• My home is paid-for, and it’s worth more than it was when I bought it – 86 votes, or 24 percent.

• My home is paid-for, and it’s worth less than it was when I bought it – 11 votes, or 3 percent.

• I still owe on my home, and it’s worth more than I owe on it –165 votes, or 46 percent.

• I still owe on my home, and it’s worth less than I owe on it – 39 votes, or 11 percent

• I don't own a home, and don’t intend to – 20 votes, or 6 percent.

• I don't own a home, but plan to buy one soon – 36 votes, or 10 percent.

• Don't know/undecided – 4 votes, or 1 percent.