THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Thursday, February 13, 1997 TAG: 9702130297
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 72 lines
Bank lobbies are filled with brochures touting loans for homes, boats, cars and vacations.
But customers seeking financial help when adopting children often get a cool response, said Norman F. Hecht Jr., a vice president of First Union National Bank.
``Banks like to talk about helping people achieve their dreams,'' said Hecht, who adopted two children from South Korea in the 1980s.
``But the minute someone mentions `adoption' to bankers, their eyes glaze over. They think you're trying to buy a baby somewhere, and they don't want to do it.''
After seven years of lining up financing for people who were adopting children, Hecht conducted a formal lending program in the Washington-Baltimore area last year. This week First Union expanded his program to Virginia.
Instead of relying on a single type of loan, the bank has tried to tailor its lending to the resources and needs of each applicant, said Hecht, who works out of a First Union office in Rockville, Md.
In some cases, people run up sizable debts with an adoption and put many of the expenses on credit cards. In these situations, Hecht tries to restructure their debt by arranging a home equity loan or a personal loan with a lower interest rate.
Most of the 100 adoption loans that First Union made last year were $25,000 to $30,000. The interest rates ranged from 8 1/2 percent to 15 percent, depending on the type of loan, Hecht said.
``Sometimes we do say `No,' '' he said. However, First Union has made loans to about 80 percent of those who applied.
Even for a two-income couple, adoption can become expensive because of the travel costs, fees and time spent away from work. Borrowing sometimes becomes necessary because very few people have sufficient savings to cover these bills, said Jane Wimmer, director of the Tidewater Regional Center of United Methodist Family Services of Virginia.
In Hampton Roads, the expenses of adopting a child in the United States often ranges from $4,000 to $8,000, said Wimmer, whose agency works with people adopting children. For those who adopt a child from overseas, the bills can be much higher - $15,000 to $20,000, she said.
Kim DeJiacomo, president of the Virginia Beach-based support group Families Through Adoption, said people seeking to adopt children would use banks for financingif it were more available.
``A lot of couples have spent every dime for infertility services,'' she said. ``By then, you're broke and you start looking into adoption.''
DeJiacomo said she and her husband relied on credit-card borrowing to cover some of the expenses of adopting their two children.
At First Union, Hecht acknowledged that the bank's adoption-lending program isn't a charitable endeavor. In addition to generating a favorable image for the bank, it brings in profitable loans. Also, these borrowers are likely to use other First Union services, such as checking accounts and investment products.
About half of the 100 borrowers who used the bank's adoption loans last year signed up for other services, Hecht said. In one instance, a couple who borrowed for an overseas adoption later used the bank's investment services to help finance the child's college education.
First Union isn't the only source of bank financing for adoptions. Another program is offered by MBNA America Bank, a Wilmington, Del.-based institution that specializes in credit-card lending. MBNA offers unsecured loans of one to seven years for as much as $25,000.
Most of these loans are in the $10,000 to $25,000 range, said Lisa DiLuzio, an MBNA customer satisfaction representative. The application process, which requires a credit report, takes about eight minutes to do by telephone. It takes two weeks for MBNA to decide whether to make the loan, DiLuzio said.
At First Union, the program requires a loan application and a personal financial statement. Often, the bank can decide on the application within a day, Hecht said.