Mutual Savings Bank

Mutual savings bank offer an important role in obtaining a real estate mortgage and they are contributors to real estate credit in several states. Started in Philadelphia in 1816 and in Boston in 1817 these banks historically provided a place where a person of limited financial means could save money for any purpose. Today, these banks are found primarily in the northeastern United States, where they compete aggressively for the savings dollar. The states of Massachusetts, New York, and Connecticut account for 75% of the nation's total. 

As the word "mutual" implies, the depositors are the owners, and the "interest" they receive is the result of the bank's success or failure in lending. Offering accounts similar to those offered by Saving and Loans. To protect depositors, laws require the banks to place deposits in high-quality investments. This includes sound real estate mortgage loans. Loan-to value ratios can be 70% to 80% (higher for FHA and VA loans), maturities are of 20 to 30 years, and as a rule, loans are made within a 100-mile radius of the bank. Presently, real estate loans account for two out of every three loan dollars at mutual savings banks. These banks are chartered and controlled by state regulatory agencies. Membership in the FDIC is available and optional.

Mutual Savings Bank to Home Financing