Community First Credit Union is now offering a new product to its members. Members wanting to purchase or build a new home or refinance an existing mortgage can now look forward to taking advantage of Freddie Mac home loan products one of the largest underwriters of mortgages in the U.S.
Gerard A. Cruz president and chief executive officer of the Community First Credit Union said about 18 months ago the credit union decided it would restructure its home loan department to better service its members.
According to Cruz it took a year for the credit union to garner approval to provide products and services under the Freddie Mac program. He said “There was due diligence on our part and on the part of Freddie Mac because this was the first time any credit union in this region applied.”
Michael Finona assistant vice president and credit manager for Community First Credit Union said “Furthermore they said we were the first credit union in the Western Pacific to be approved.”
Freddie Mac’s Web site states “Homebuyers apply for mortgages from primary market mortgage lenders such as banks thrifts (which include savings and loan associations and savings banks) mortgage companies credit unions and online lenders.” The Web site also says “After the closing the primary lender may either hold the mortgage in its portfolio (along with other loans it has made) or sell it in the secondary mortgage market. When primary mortgage lenders sell loans in the secondary market they generally sell them as loans to an institution like Freddie Mac. They then use the proceeds of the sale to make new loans to other homebuyers in their community. Freddie Mac is one of the largest investors in mortgages. As a major player in the secondary mortgage market we buy mortgages that meet our underwriting and product standards package those loans into securities and sell the securities to investors on Wall Street.”
“Community First has been doing mortgage loans for a long time ” Cruz said. “We completely tore apart the department. We looked at separate elements and began to put together a program and a department we thought for lack of a better term was worth putting our brand — our name on ” he said.
Cruz said while this process has taken 18 months Community First has changed its direction and focus in the last five years. He said direction is based on the needs of its 7 000 members. “We do a lot of demographic collecting — age place of employment how many kids things of that nature. So that we know on average that members are moving in this direction in their life and at this point in their life they’re probably not going to be borrowing and they’re going to be more apt to save. We have that type of information and that type of profiling of our existing members. We use that information to tell us where we need to grow.”
He said it’s exciting that Community First is able to provide another option or solution such as Freddie Mac to the credit union’s members “Particularly for the borrowers who don’t meet certain requirements.”
Finona said for members the service is transparent. “All the member wants to know is how are you going to meet my needs.” According to Finona there are no pre-payment penalties “If you want to pay more into your mortgage to reduce your interest you can.” He said members would see better mortgage rates.
Freddie Mac’s Web site states “The supply of cash the secondary mortgage market makes available to lenders through this process drives down mortgage rates by as much as one-half percent — saving the homeowner with a $100 000 mortgage around $12 000 in interest over the life of a 30-year loan. That savings helps make homeownership affordable for more families and individuals than would be possible without the secondary mortgage market. As a result homeownership is a reality for many American families and not just a dream.”
Cruz said another competitor benefits the consumer. “We see a lot of opportunities for us to make a difference in that market and it does a lot for our existing members to whom we are here to provide benefits for. It gives them a venue. They can come here now and look for a really competitive rate and a really competitive product and we have a bigger opportunity to become their primary financial institution.”
Finona said real estate was a long-term investment. “When you tap into that that member or client is going to come back and say ‘Okay I need a car now ’ or a credit card.”
According to Cruz the financial performance report of the credit union indicates Community First came in slightly above $42 million in assets in March and was slightly more than $43 million in assets in June. He said the amount of loans have increased by 14%. MBJ