If you have ever felt perplexed about why banks accept some loan requests and turn down others, you will have an opportunity to learn the lenders’ perspective at an upcoming business breakfast titled “Money: To Lend or Not to Lend: The Lenders’ Inside View.”
Among the panelists is James Hyman who will speak from his perspective as the founding CEO and current president and CEO of Hopewell Valley Community Bank (HVCBank).
Hyman finds that many people have misconceptions about banks and bankers. “They think that banks don’t want to lend money. But the truth is, we want to lend. If we don’t lend money, we don’t make money,” he says.
The panel also includes the CEO of the New Jersey Bankers Association, John McWeeney who will moderate the event, and panelists Tim Thompson from Investors Bank, and Nick Del Deo, vice president of sales from Principis Capital. Sponsored by the Real Estate Business Alliance, a program of the Princeton Regional Chamber of Commerce, the event takes place at the Springdale Golf Club in Princeton on Thursday, October 15, from 7:30 to 10 a.m. Cost: $40, $30 for members. Register online from the events page at www.princetonchamber.org. For more information, call 609-924-1776.
Although the breakfast meeting will address issues especially relevant for professionals in the fields of real estate, law, investing, and banking, anyone interested in the process of lending money can attend and learn from the discussion and networking event. The Princeton Chamber expects a mixed group of attendees.
Some of the questions the panel will explore includes: Will lending continue to be subsidized by the federal government? Is the residential mortgage market going to loosen? Where is money coming from for 2016?
From the perspective of a community bank, Hyman says the money always has and always will come from the communities the banks are in. One can look around and see that the banks’ clients are building homes and starting or expanding businesses.
When HVCBank was formed in the late 1990s, community members were key contributors in making the vision a reality. Hyman had become part of the bank’s original team when founder and chairman Patrick Ryan made him the founding CEO. Community members bought stock in the bank and they opened accounts. Banks make money when people make deposits, open checking and money market accounts, and make interest payments on loans they take out, he says.
Hyman believes that 2016 will show some growth in the housing market and home prices will rise slowly. One of the challenges in New Jersey has been the trend of both younger and older people moving west. However, Hyman sees Mercer and Hunterdon Counties doing well overall. “Being part of Einstein’s Alley is a benefit,” he says. Companies are moving here and staying here. Real estate, especially in West Windsor, East Windsor, and Hamilton, is robust. Mercer and Hunterdon will continue to attract home buyers and companies. “We have a very educated community and very strong school systems. That’s good for us,” he says.
Overall, real estate stands to benefit if the Fed does raise interest rates, and the market starts thinking about longer term rates. Individuals might feel motivated to buy before rates go up even more in the future. “Today rates are in the area of four percent, says Hyman, but I’ve seen interest rates north of 10 percent in the past.”
Another positive factor is that home ownership could become more appealing to the millennials over time. In recent years, the younger generation has had a greater interest in renting for several reasons. They are marrying later and are interested in easy transit and entertainment. In many cases, they have a high level of student loan debt, and the thought of coming up with a down payment has been unappealing.
On the other hand, rental prices are rising, and higher rates could drive millennials into the home buying market. Another fact for renters to consider is that home owners get tax deductions.
Hyman’s interest in the world of money grew out of his experience helping his father renovate the basement of the home where he grew up in Kearny, Hudson County. His father, a plumber by trade, had decided to raise the basement ceiling height by lowering the floor, literally by digging down the existing floor by two feet. One of Hyman’s jobs was to pass heavy bags of dirt out the basement window. Hyman laughs as he recalls telling his mother that when he grew up, he wanted to make enough money so if he ever had to take on a job like this again, he could pay someone to do it.
Hyman was introduced to the banking industry by coincidence or perhaps by destiny a few days after graduating from high school. He had responded to a newspaper ad for a job as a mail clerk at Carteret Bank in Newark. He landed the job, and it turned out to be a great opportunity, he says. It was a “roll up your sleeves and work” kind of job where he learned lots of life lessons and gained a lot of experience. “I hope young people today still have these kinds of opportunities. Many companies are too focused on an applicant’s credentials.” he says.
In 1965 he joined the Navy during the Vietnam War, and after serving his term, returned to Carteret and earned a degree in political science from Rutgers University. His initial plan was to become a lawyer but he later had a change of heart.
The banking industry was interesting, he said. “I was learning and advancing professionally. I liked lending money. We work on Main Street and work face-to- face with people. It’s a great thing to do. It’s rewarding to help people see their dreams come true.”
If you’re looking to borrow money for purchasing a house or for any reason, before approaching the bank, you need to have your ducks in a row, he says. The banker will want to know what you need the money for and that you’ll have the resources to repay it, and in certain cases, collateral. This might seem like common sense, but someone who has only used credit cards for borrowing in the past might not have thought about it from a banker’s perspective.
Hyman’s counsel to potential borrowers is simple: Don’t borrow simply because you can, but do borrow when something is important because it can make a lasting, positive difference in your life.
Hyman’s approach to banking is based on principles he learned as he was working his way up in the field. He says that good banking is about filling a need for credit, not creating a perceived need. It’s about filling a genuine existing need that will benefit the borrower, the lender, and ultimately the community.