BAR HARBOR — For the first time since its founding in 1902, Bar Harbor Savings & Loan has begun selling some mortgage loans to another institution.
“We are now selling long-term mortgages on the secondary market,” said president and CEO Bill Weir. “We plan on keeping commercial and short-term loans, normally up to 15 years. But we really can’t keep long-term loans in our portfolio because of the rising interest rates.”
He said the Savings & Loan is selling long-term mortgages to the Federal Home Loan Bank in Boston.
“But we keep the servicing,” he emphasized. “You make your payments and do all your business here. We would never, while I’m here at least, sell any servicing. When the servicing is sold and it goes from one place to another, people lose the relationship they have with their local bank.”
Weir said that selling long-term loans will significantly increase the bank’s capacity to make mortgage loans. He noted that many other banks routinely sell their mortgage loans.
As for commercial loans, Weir said, “We tend to specialize in small accounts, under $1 million. We’re not doing huge, multi-million-dollar businesses, but we do have the expertise with small businesses, and that works out well.”
For many years, he said, Bar Harbor Savings and Loan has used the Federal Home Loan Bank to collateralize its loans.
“They know that our loans are really good,” he said. “We have very, very low delinquency rates. We’ve had one foreclosure in 18 years, and I inherited that when I came here.”