BY JOE OLENICK

joe.olenick@lockportjournal.com

Fred White is in the process of building a house.

The house is in Somerset and is described by White as an angled ranch. That means a third of the house is at an angle, while the rest of the house is parallel with the road. It also has a split bedroom layout.

“The master bedroom is at one end of the house, while the other bedroom is at the other end,” White said. “Normally, the bedrooms are together.”

There is another thing about the house, which can be said about most houses. It costs a lot of money.

White went to Niagara County’s Federal Credit Union, where he has been a member for about 20 years. He needed a construction loan to finance the cost of building his house. While some might be discouraged from seeking a loan in a recession, White said he didn’t have any trouble getting one.

“I was surprised,” he said. “I went and asked them about construction mortgages. I talked to the president. I wasn’t sure if they’d write one, so I had to check.”

What he found out is that despite the problems with some banks, the credit union did give mortgage loans.

“I told ’em what I needed. They said ‘no problem,’ ” White said.

Nancy Kasprzak-Whitmore, president and chief executive officer of Niagara County’s Federal Credit Union, said she felt getting a loan from a credit union is about the same as it was before the economy was lousy.

“Credit unions have always been willing to serve its members,” Kasprzak-Whitmore said. “We look at what’s good for our members. It may be a great deal, but is it a great deal for you? Can you afford it?”

She added that credit unions are more conservative, meaning loans are given if it makes sense and it’s good for them in the long run. People should take a look at their own financial situation before applying for a mortgage loan and live within their means, she said.

“Sometimes we act like a parent,” Kasprzak-Whitmore said.

Some banks have also been able to avoid the financial crisis, just as the credit unions have. With the low interest rates, getting a loan from M & T Bank is easy for someone if they have good credit, spokesman Chet Bridger said.

“They should have no problems,” he said. “The market has changed. The subprime lenders, a lot have left. Worse credit means a little more trouble.”

Subprime lending is giving loans to higher-risk borrowers. A steep rise in subprime loan defaults has helped plunge the economy into recession, experts have said.

National mortgage rates have gone down, according to Freddie Mac. Last week, rates on 30-year mortgages fell to a record level for a fourth straight week, dropping to the lowest mark since Freddie Mac started tracking rates 28 years ago in April 1971. Rates have been falling since late November, when the Federal Reserve announced a plan to spend up to $500 billion to buy up mortgage-backed securities in efforts to help out the U.S. housing market.

Freddie Mac reported last week that average rates on 30-year fixed mortgages dropped to 5.01 percent, down from the previous record of 5.1 percent set the week before. It was the 10th straight weekly drop and nearly a full point below the rate of 5.87 percent at the same time last year. Rates have declined nearly 1.5 percentage points since October, Freddie Mac said.

The average rate on a 15-year, fixed-rate mortgage dropped to 4.62 percent, the lowest point since June 2003. That rate was 4.83 percent last week, Freddie Mac said.

Average rates on five-year, adjustable-rate mortgages fell to 5.49 percent, compared with 5.57 percent the week before. Rates on one-year, adjustable-rate mortgages rose to 4.95 percent last week, an increase from 4.85 percent.

The falling rates have led to an increase in mortgage applications, that is until this month, according to the Mortgage Bankers Association. The organization reported that its weekly mortgage application index fell 8.2 percent for the week ending Jan. 2, compared to the previous week.

As for White, the recession didn’t discourage him from getting a loan. Last week he was putting in a hardwood floor on his new house. White said he is planning to move in about March 1.

“I’m building it — I’m doing it all myself,” White said.

Contact reporter Joe Olenick

at 439-9222, ext. 6241.