Small Banks See Opportunity in Mortgages

Efforts to revive the depressed real estate market are creating opportunities for home buyers, homeowners and the banks that missed out on the fun during the last housing bubble.

Big banks are buried under an avalanche of paperwork, as homeowners have rushed to refinance at record low interest rates and first-time home buyers have tiptoed back into the market, lured by depressed home prices and an $8,000 tax credit.

These banks -- already spread thin after undergoing massive layoffs in the past 12 to 18 months -- also must work with scores of borrowers who are having trouble paying their existing mortgages, observers say. ...