South-Central : Bank Praised for Opening Area Office

Community leaders last week heralded the opening of a Coast Federal Bank home loan office in the historic Dunbar Hotel, noting that it is the first major lending institution to locate in the area in years.

“The key thing here is that Coast Federal Bank has made a commitment to come into the area, and we have a community here with dire banking needs,” said Anthony Scott, executive director of the Dunbar Economic Development Corp., which helped coordinate the move. “This is the first major bank to come and build on Central Avenue in decades.”

The small, unassuming office at 4223 S. Central Ave. will begin taking applications this week. It will provide home loans for moderate- to low-income residents in South-Central, where the average home price is about $100,000. Bank officials said one lender’s program will allow buyers to purchase a home with just a 5% down payment.

At the grand opening, community leaders and city officials said they hoped the loan office will help pave the way for other banks to come into South-Central.

“I think a lot of people will be watching to see what happens with this branch,” said Paul Hudson, president of Broadway Federal Savings & Loan Assn., a South-Central bank. “If Coast does well here, it’ll do away with the idea that you can’t make money in South-Central.”

Misperceptions and concern over default rates have long kept lenders at bay, Hudson said, because some lending institutions believe they are taking a higher risk on loans in areas such as South-Central.

“All those stereotypes are inaccurate and have led to people saying, ‘Let’s stay out,’ ” Hudson said.

Rob Hunt, president of Coast Federal Bank, agreed, adding that lenders suffer greater losses in more affluent areas where homes are more expensive.

“The type of loans made in these areas tend to perform better, and the default rates are much lower. It’s nowhere near what it is in affluent areas,” he said.

For now, bank officials and community leaders said, they will focus on getting the message out and inviting residents to stop by the office.

“We want to make it here, and we’ll do anything we can. And part of doing that will be getting out there into the community,” Hudson said.

Information: (213) 233-1580.