Relatively new to the Washington market, California-based Sunwest Bank has found a way to benefit the community while unburdening some of its OREO (Other Real Estate Owned) portfolio.
OREO properties typically find their way onto a bank’s books when loans for the properties fail. The properties, used as collateral, then become dead weight on the bank’s bottom line.
Sunwest, with its only Washington branch in University Place, is donating one such OREO property to Habitat for Humanity in Bremerton.
“A distressed asset in Sunwest Bank’s portfolio, the home will be refurbished by Habitat for Humanity, allowing the current residents to remain in the home,” the bank said in a release Friday.
“Sunwest Bank’s generous donation of the $80,000 property enables Habitat for Humanity to not only provide safe, decent housing in a neighborhood in transition, but also achieve our larger mission for the community,” stated Daryl Daugs, director of Habitat for Humanity of Kitsap County.
“The home kicks-off our Neighborhood Revitalization Initiative in Bremerton. This donation allows us to get the initiative off the ground quickly and, ultimately, provide huge benefits for the city,” he said.
With similar remnants of the Great Recession remaining, the example set by Sunwest could lead to more banks – especially community banks that already donate money and volunteer time to local projects – finding charitable uses for distressed properties still being held.
“It sounds like a good contribution to the community,” said Scott Jarvis, head of the state Department of Financial Institutions, which regulates banks in Washington.
“What would we rather have in our community? Empty houses or houses that are occupied?” he asked. “The more homes that are occupied, the better our communities are. I applaud them for their contribution.”
Rick Riccobono, director of the Division of Banks at DFI, agreed.
“I think it’s a great idea,” he said. “Banks in general have always served their communities. It makes perfect sense.”