Recent financial woes on Wall Street should not affect Covington County initially, according to local experts in the real estate market and banking industry.

This past weekend, investment bank Lehman Brothers declared bankruptcy and Bank of America acquired brokerage firm Merrill Lynch. Earlier this year, investment bank Bear Stearns also declared financial insolvency, and mortgage giants Freddie Mae and Fannie Mac were taken over by the federal government.

The news sent Wall Street into a decline, and the Dow Jones Industrial Average fell more than 500 points on Monday. After a tumultuous day on Wall Street, trading ended on Tuesday with the Dow up 141 points.

Buddy Wilkes, president of Southern Independent Bank, said that the fates of large entities like Lehman Brothers could cause more banks to move to tighter credit standards.

“Certainly if banks continue to sustain losses, then they will continue to tighten their credit standards,” Wilkes said. “At our bank, we’ve only been open for about 20 months, so we do not have a lot of loan problems and aren’t really subject to the sub-prime lending mess.

“But certainly, the government doesn’t want to see bank failures or the financial collapse of these large companies.”

Tripp Bass, president of the Covington Association of Realtors, said the financial struggles of Wall Street have had an effect on recent mortgage rates. He said that Monday’s quoted rate for a 30-year fixed mortgage was 5.5 percent, a 15-year rate was 5.125 percent and a short-term floating rate at 5 percent.

“We haven’t seen rates like this since 2001 or 2002,” he said. “And that rate might be reduced even further in the coming days. We think this could stimulate the local housing economy.

“It’s always possible that people who have money invested in stocks and mutual funds, they might get worried and feel that real estate has more upside potential. We saw the same thing after 9/11, when a lot of people got out of the stock market and into real estate.”

The Federal Deposit Insurance Corporation (FDIC) provides insurance for individual banking accounts, up to $100,000 in most cases. Wilkes said it is important for consumers to utilize the FDIC protections as much as possible.

“Our workers (at SIB) are trained on how to put the money in the bank in different accounts so it is FDIC insured,” he said. “There’s different ways to do it, but we always want to make sure you can get as much insurance as you can, on your accounts.”

Wilkes added that although Wall Street’s impact can be felt across the nation, it isn’t likely Covington County will see too much effect from the recent financial woes.

“We live in a town where we probably don’t get the ‘highs,’ when Wall Street is doing really well,” Wilkes said. “But at the same time, we also don’t get as low as the real ‘lows.’ It’s probably good for the local economy that we’re that way.”