One battleground in the war for home-loan market share in Connecticut takes place every Monday in the Hartford Courant.
The newspaper lists motgage rates for dozens of local lenders. And the deep discounts are obvious, according to locals.
"There is just an oversupply of people scratching around for loans," said James D. Shelton, chief executive officer at First Federal Savings & Loan of East Hartford.
Mr. Shelton should know. Hartford is ground zero for price competition in adjustable-rate loans.
According to HSH Associates, a mortgage statistics company in Butler, N.J., Hartford is one of the most price-competitive markets in America in a nationwide mortgage market that can send a lender's originations plummeting should they price their loans 1/4 below the market.
Higher interest rates have sent borrowers scurrying for the lowest available rate, most often an adjustable rate.
But lower overall volume has meant that thrifts, the kings of the adjustable-rate mortgage, have had to engage in some avant garde pricing.
In markets like Hartford, pirate pricing takes place every day.
Interest rates on one-year adjustable-rate loans in Hartford average. just 5.29%, taking into account charges of an average of 1.54 points, according to HSH.
The nationwide average is 5.7%. The only market worse than Hartford is Morristown, N.J., where rates average 5.09%.
Fierce price competition is not reserved to the East Coast, according to HSH.
In San Francisco the average one-year ARM is priced at 5.54%. In Orlando. Fla., it's 5.39%. And in Miami, ARMs go for 5.47%.
And lenders had better stick close to market rates. Donald E. Crandall, a vice president at Eagle Federal Savings Bank, Bristol, Conn., said his loan volume "will drop dramatically" if he prices his adjustable-rate mortgages 1/4% or more above the marketplace. If he prices within 1/8%. "I'm fine," he said.
"If you allow a competitor to get far away from you, you will not do any business at all," said Gene C. Guilbert, chief executive officer, American Bank of Connecticut, Waterbury.
Lenders in the Connecticut market say Torrington Savings Bank, in Torrington, is the most price competitive lender in the state.
It offers one-year, adjustablerate loans for 4 1/4, 4 7/8 with no points.
Lenders say Hartford's market is more brutal than most because of other economic factors. The state's economy is still sluggish One lender described it as being recessive. That's made home buyers fewer in Connecticut.
"In an economy that is stagnant you just don't have people moving in," said Mr. Guilbert, of American Bank. "We are all scrambling to get market share in a stagnant market."
"I don't see anything changing," said Mr. Shelton. "The economy is certainly not improving. The pricing will stay competitive."
In Hartford, in particular, the customers are mostly interested in the loan's price, say local bankers. Many corporations are located in the Hartford area. They bring borrowers who move often -- and care little about service on their home loan.
To them, price is the major selling point.
And in the current interestrate environment price is even more pivotal.
As a result, thrifts like First Federal are seeing loan production and profitability drop off even further.