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Our Strategic Approach to the Shifting Mortgage Lending Market

August 09, 2023

With the decline in demand for residential mortgage loans and refinancing, banks in Connecticut are adapting their strategies to focus on other products and services to navigate the market downturn. GSB recognized the need for flexibility and has actively embraced new opportunities in the lending market.

Expanding Home Equity Loan Offerings:

In a recent interview with the Hartford Business Journal, Lyle Fulton, the Executive Vice President and Chief Lending Officer of GSB, emphasized the dynamic nature of the banking industry. He acknowledged that customer preferences and market conditions shift constantly and that banks must stay agile to cater to their clients effectively. Said Fulton, “During the pandemic, low interest rates incentivized first mortgage and refinance loans, while home equity loans lagged. However, the situation has now reversed, with customers opting to leverage their home equity instead of refinancing their low fixed-rate mortgages.”

Navigating the Inventory Issue:

Jason McConnell, the Vice President and Residential Lending Manager of GSB, also shed some light on the impact that the current residential real estate market has had on the bank’s lending business. He pointed out that the drop in mortgage lending volume is primarily due to a lack of available inventory, but homebuyers are willing to pay higher interest rates if they can find a suitable home. However, this has become challenging, particularly in Connecticut’s market.

To address leaner home inventory, GSB launched the GSB Lending Center: a direct lending channel that enables customers to access mortgage, home equity, and other lending products conveniently through phone or email. As McConnell discussed, this move not only simplifies the lending process for customers, but also helps GSB lower its expenses. And, while other banks are reducing staff due to market conditions, GSB is actively expanding thanks to the success of its direct-lending model.

GSB also recognizes the potential in the new housing construction market and has positioned itself to benefit from this booming sector. The bank places a strong emphasis on construction-to-permanent loans, capitalizing on the record-high housing starts. Additionally, GSB’s partnership with Federal Home Loan Banks and the Connecticut Housing Finance Authority to offer down-payment assistance grants and loans has helped boost the bank’s purchase volume. This strategic collaboration showcases GSB’s commitment to supporting customers through innovative solutions.

To read more about how Connecticut’s lending market is affecting banks in CT, view the Hartford Business Journal article featuring GSB by clicking here.