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Tahoe banks see slight uptick in loan applications

All Adam Ricards wanted was a home loan.

But even with a 630 credit score, the South Lake Tahoe resident and his wife found themselves jumping through hoop after hoop to get in place for a loan.

“For five months we were doing that,” he said. “It kind of felt like they were just holding us on a line or whatever until something opened up.”

So Ricards eventually gave up and got financing from his parents for his home. Having spent over a decade improving his credit score, Ricards said he was frustrated when he couldn’t get a loan.

“It seems like they don’t want to give any loans at all,” he said.

Banks in the Tahoe area say the market for loans is picking up ever so slightly, but those banks are still cautious about only giving loans to those with solid financial situations.

Shelly Wright, vice president and branch manager at Plumas Bank in Truckee, said she’s seen a number of people afraid to apply for loans because they think banks have tightened up their lending operations.

“That is deterring a lot of loan requests,” Wright said. “People are really frustrated right now – look what they’re going through.”

Plumas has seen an increase in construction loan applicants in the last month, Wright said, but other loans are flat, because people are worried about their qualifications.

“It’s just hard to qualify these days,” Wright said.

Wright said so many people have had “some type of significant credit event,” like the loss of a job, foreclosure of a house or other problem, so credit scores aren’t a good indicator of loan qualifications.

“We have to go away from that and really look at credit again,” she said. “It’s the big picture now.”

Lynda Nelson, branch manager at El Dorado Savings Bank in Tahoe City, said her bank has seen some growth in the past few months, mostly from individuals refinancing their loans and mortgages on existing properties. The bank has also provided a few construction loans.

“We’re not doing too many (new housing) purchase loans,” Nelson said.

Many of the homeowners refinancing have lived in their homes for a long time, Nelson said, so their homes still hold value in the down economy.

“Most of the people who are refinancing, their job situation has not changed,” she said. “They still have a strong equity position.”

Fewer banks that provide loans has caused business at those remaining banks, like El Dorado Savings Bank, to grow, Nelson said.

“It’s very positive for our business,” she said.

Tahoe-area Wells Fargo branches – in Incline Village, Zephyr Cove and South Lake Tahoe – are seeing small positive signs but generally, the loan market remains soft compared to years before the recession, according to Natalie Brown, a spokeswoman for Wells Fargo in northern Nevada.

“We’re starting to see some of an uptick,” Brown said.

Brown said the businesses looking for loans now are generally a bit stronger candidates than those who came a year ago, something that can be measured by a business’s cash flow. The bank’s job, she said, is to always be responsible and make sure those receiving loans can pay them off.

“It’s important for us to continue to be a prudent lender,” she said.

And Wells Fargo’s customers in Tahoe are sounding more hopeful, Brown said.

“They’re starting to feel a little bit more optimistic about the future, so that’s good news,” she said.

Ricards wondered where the money from the Troubled Asset Relief Program had gone, since the money was meant to help banks provide loans and stay afloat.

“Where is that money going? Because it’s not going to loans,” Ricards said.


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