what is the risk borrowing home loan from a small and new bank?
I am having a traditional loan application with a big bank. I just found a small bank in Florida, founded in 2004, is offering better rate and cost compared to those big famous banks. The small bank is member of FDIC. Somebody told me small bank may not follow federal regulations. How do I tell if a bank is a qualified home loan lender that follows all lending regulations? What is the risk borrowing home loan from a small bank? A: FDIC is great and all, but it has almost nothing to do with lending. FDIC means that they have a Federal Deposit Insurance Company protecting your deposits (checking, savings, CDs, IRAs, etc) in the case of the bank going belly up. If the bank ends up getting in trouble, they will sell your loan off to another bank or financial institution for the capital. This can happen in large banks as well as small banks, especially the way the economy is right now. To test this small bank for their federal guidelines, when you walk in next time ask them where they have
