South Carolina banks and the economic storm. Should you worry?

Even as the bad national news mounts for the banking and mortgage industries, local and state leaders say things still are fine here, even if some mortgages might be difficult to come by.

The South Carolina Bankers Association recently released a statement reassuring people of the soundness of banks in the state.

"The fact is that most banks in South Carolina have been in existence for decades and plan to serve their customers for many more years to come," the statement said.

And, according to experts, that's exactly what is likely to happen. The current issues facing the national -- and local -- financial markets can impact the average person in two ways -- at the bank and when borrowing money.

BANKING

Even with all the turmoil in the financial industry, there's likely to be little impact for the average person with a checking account, a savings account and/or retirement accounts.

Individual bank accounts are insured up to $100,000 by the Federal Deposit Insurance Corporation. And, by talking to a personal banker, it's possible for a family to structure accounts in a way that $800,000 is insured, said Justin Strickland, the past chairman of the South Carolina Bankers Association and president of Southern First Bank.

Anyone with more than that is almost certainly sophisticated enough to understand the limits, said Tim Koch, chairman of the finance department at the Moore School of Business at the University of South Carolina.

At Bluffton-based Atlantic Community Bank, deposits still are growing and president Robert Trask is "cautiously

optimistic."

Randy Dolyniuk, chairman of island-based CoastalStates Bank, echoed that, saying his bank is healthy and that banks face enough scrutiny from regulators that failures are unlikely in this market.

Koch, the USC professor, said South Carolina banks are facing a difficult market but there's a silver lining -- we're in a better position than banks in Florida, California, Nevada, Michigan and a slew of other states.

"We've got it so good compared to many states," Koch said.

MORTGAGES

While there's little concern for money deposited in banks, the mortgage market is a different story. Money can be tight and hard to come by, according to Realtors and experts.

Despite their financial issues, loans guaranteed by Fannie Mae and Freddie Mac are easy to find, said James Wedgeworth, a Realtor with Charter I Realty & Marketing.

But, finding money for mortgages that don't conform to the $417,000 limit for Fannie and Freddie guarantees is tougher, he said.

"We've had some deals fall through that we thought would have no problems (because of the mortgage)," Wedgeworth said.

There should be some relief as of Jan. 1, when that limit is raised to $625,000 by federal legislation.

CoastalStates Bank has pledged to create some $50 million in loans that aren't backed by Fannie, Freddie or other government-sponsored entities. Dolyniuk, bank CEO, said the problem is liquidity -- investment firms have little desire to buy mortgages after all the problems with the subprime market.

People with good jobs, documentable income and a strong credit record can still find mortgages, although it might take some looking, said William Harrison, director of the real estate center at the University of South Carolina.

The mortgage market won't sort itself out until the market is sure foreclosures have reached their peak, he said. Once those numbers start to decline, money will start flowing into mortgages again and homebuyers will start coming back.