pa_18 Strategies_wp by Prime Alliance Solutions, Inc.

18 Strategies Prime Alliance Solutions, Inc. January 2009

Our time is now, credit union mortgage lenders! For the next 18 months we have a rare opportunity to become our members’ housing finance provider of choice today, tomorrow and for decades to come. We’re doing our part to help you seize this opportunity. 18 Strategies in 18 Months is Prime Alliance’s best thinking on the actions credit unions should take right ow to gain substantial market share. Presented in four broad categories Imagine, Tune-up, Concentrate, Differentiate - you’ll find our 18 suggestions for better lending. We hope you find 18 Strategies useful and thought-provoking. Enact some or all; create additional strategies. Our foremost intent is to begin a dialogue about those things that will make credit unions better housing lenders. And, if you do create additional strategies, we hope you’ll share them with us and with other credit unions. Post your ideas at www.18strategies.com. If you’re interested in more information on the 18 Strategies, or have ideas you’d like to share, contact Dan Green at dgreen@primealliancesolutions.com.

Imagine

Tune-up

Concentrate

Differentiate

Strategy 1:

Make Your Culture a Housing Finance Culture It's time for Housing Finance, what we once thought of as mortgage lending, to dominate the culture of every credit union. Becoming our members' source of affordable, sustainable, stress-free home lending is critical to their financial well-being, our relationships with them, as well as for the vitality of our credit unions.

Want More? Read the ‘Culture Section of the ‘Two to Ten’ White Paper. It has many good suggestions and provides several great references for learning about and instituting cultural change.

Much has been written about the opportunity we've been presented with. Consider this: $1 trillion of origination capacity disappeared between 2007 and 2008, much of it never to return. Where will members turn? Their credit union. Let's be there for them. The first step is credit union-wide commitment to housing finance as a driving, long-term, core strategy. Then your credit union must live the strategy. Cultural change has been cited by the CU Housing RoundTable as the crucial first-step to becoming our members' housing lender of choice. Their suggestions for navigating such a change can be found in their Two to Ten White Paper, available at www.cuhousing roundtable.com/PDF/cuhrt_two_ten.pdf. Another excellent source of information is the presentation Bryon Nabors made on cultural change during Prime Alliance’s 2008 Symposium. Mr. Nabors is Vice President of Training and Development for GTE FCU. It's available for download at www.primealliancesolutions.com/culture/nabors.pdf.

Strategy 2:

Top Three in Three The most successful lenders know their current market position. They also know their desired position. Choose yours. Prime Alliance suggests determining where you'd like to be in three years. Set interim goals for 12 months and 24 months so progress is easy to monitor on your way to your 3 year goal. Measure dollars and measure the number of loans. Both metrics are important. Units help you track the number of members you've helped become homeowners. This is also the best way to track productivity.

Want More? Read the ‘Market Share’ Section of the ‘Two to Ten’ White Paper. It’s a great place to start!

The first step? Knowing your present market position. It's easier than you think. The CU Housing RoundTable's www.cuhousingroundtable.com Two to Ten White Paper discusses this topic in detail. In addition to learning your current market position, you'll get a valuable first-hand look at your competition. Shoot for a top three spot within three years. The time is now. For the next 18 months we'll experience the best market in the 30 year history of credit union mortgage lending. We should know: several members of your Prime Alliance Team have been lending through most of that time. Trust us. We've not seen a more favorable market nor a stronger opportunity.

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Strategy 3:

Appoint a Housing Czar Isn't it time for every mortgage lending credit union to appoint someone whose sole responsibility it is to concentrate on all things related to housing finance? We think so. Who is this person, the ideal candidate? An intense, caring, passionate, strategic individual who can execute yet also understands that housing is today's toughest economic challenge for most members. This is who you seek. Perhaps this person works in your mortgage department today. They may be hidden elsewhere in the credit union, however. Look high and low, in every nook and cranny.

Want More? The CU Housing RoundTable authored a paper during 2008 entitled ‘How to Appoint a Housing Czar’. Visit the RoundTable’s website for this Paper, and the four others it has published on strategic topics.

'Passionate' is over-used as well as over-wrought. Yet we can't express fervidly enough the zeal with which the Housing Czar must pursue their mission. And a big mission it is. For most of our 30 years as mortgage lenders, the mortgage department has been cocooned, off in its own little corner of the credit union, doing its own thing, not integrated with all other lending activities and unplugged from the broader world of real estate finance. One task facing your Czar is to bring mortgage lending into the bright sunlight of housing finance. This position's top-level responsibility? Drive the cultural and business changes necessary to make housing finance a front-and-center activity, a core leading strategy for the credit union. Tangibly, this responsibility may take the form of an annual housing finance plan for the credit union, a plan that examines and explains the housing situations in the communities in which the credit union lends, explores the local real estate community and forms relationships, understands the mortgage programs and products necessary to serve the membership and ensures that systems and processes deliver the best member experience in the most efficient manner. Planning is step one. Execution is a more important second step. The CU Housing RoundTable published a White Paper on this topic during its Third Annual Meeting on October 16 and 17, 2008 in Seattle. It’s available for download at www.cuhousingroundtable.com.

Did Ya’ Know…

...‘Czar’ is a strong title, one, we admit, that may be a bit too ‘charged’. That’s part of the point, though: for too long our housing finance strategies have not been strongly championed. If we’re to reach ‘Two to Ten’, avert the next subprime crisis plus tackle housing finance opportunities as yet unforeseen, then a Czar is what every credit union needs.

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Strategy 4:

Fine-Tune Your Product Mix You’ve committed to cultural change, set your sights on a top three market position within three years and appointed your housing czar. What's next? The right product mix for your members and your communities.

Want More? The CU Housing RoundTable published two White Papers with helpful product tips in 2008, one entitled ‘ReImagine Your Balance Sheet’, the other ‘Post Sub Prime Housing Finance’. Both contain suggestions on creating a product mix for your credit union.

What's the right mix for the next 18 months? Back to basics is our recommendation. Mortgage lending, like high fashion, has gone retro. Conventional, conforming fixed rate and straight-forward adjustable rate loans are sexy for one simple reason: members understand them and can affordably sustain them. Most people, with the exception of your more sophisticated borrowers, are done with the exotics. Another item for your menu: Government Loans. Don't miss Strategy #14. It gives you the skinny on this important throwback mortgage product. Don't forget, too, that affordability products remain important. It's easy to lose sight of the fact affordable housing and affordable lending remain a significant issue for our members and for our country as a whole. Our portfolios are an important lending tool for this market. An astonishing prediction: by 2009 there will be 40% fewer mortgage brokers plying their trade, due, in part, to the fact that their sources of funds have or will all but disappear. Portfolio lenders, like credit unions, will take their place. The CU Housing RoundTable published a White Paper in 2008 entitled, ‘Re-imagine Your Balance Sheet’. The Paper addresses, in part, the product mix credit unions should consider and the practical and prudent ways in which we can use our balance sheets to offer them. Think simple, think affordable while fine-tuning your product mix.

Did Ya’ Know…

...another advantage of designing the right product mix for your credit union is a higher ‘Book-to-Look’ ratio. For us mortgage lenders, ‘Book-to-Look’ is auto lending-speak for pull-through. Talk to your car loan compatriots in consumer lending. We think what you’ll find is credit unions tend to have a higher ‘Book-to-Look’ on auto loans than many of our competitors. Sadly, that’s not the case when it comes to mortgage lending. While we’re getting better at pull-through, we’re still too much in the application taking as opposed to loan closing business. If we’re serious about putting members in homes more affordably and about achieving ‘Two-to-Ten’ then we’ve got to make some improvements. Perhaps the goal should be matching mortgage lending’s pull-through with consumer lending’s ‘Book-to-Look’. Do your research, and set a goal today.

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Strategy 5:

Fine-Tune Your Member Experience Together we revolutionized the housing finance experience. Our mutual innovations turned what once took more than eight weeks into a routine, two-week, mostly paperless process. Closing a loan has never been easier. Prime Alliance credit unions deliver the best borrowing experience in the lending industry. That much we know. Let's not get complacent.

Want More? Visit www.primeallian cesolutions.com for more information.

What to do? Go back to the beginning. Walk the member path as you did when your credit union first used Prime Alliance. Is it clear? Most certainly there are barriers to be removed, however small. Any step that could slow a member down, confuse them or cause them not to complete the process should be examined. Consider having a group of members participate in a focus group exercise, watch them walk the path, then make your adjustments based on their recommendations. Are you looking for big adjustments? Probably not since your member experience is already the best in your community. Striving for better, though, differentiates your credit union all the more.

Strategy 6:

Fine-Tune Your Lending Operation Several of your Prime Alliance Team Members are car guys. We fiddle and adjust constantly so they're always running their best. We know from experience that if we leave them alone for very long performance will decrease, imperceptibly at first, then all of a sudden, noticeably. Lending operations are no different. The two benefits to fine-tuning your operation are inextricably linked. You just read about the first benefit in Strategy #5. A better member experience will certainly get your credit union noticed in your communities. That better experience, though, is the one of the most significant, controllable variables that affect origination costs. If itâ&#x20AC;&#x2122;s difficult to originate, it will be expensive to process.

Want More? SMS Consulting helps credit unions improve their operations. Visit www.consultsms. com for more information.

Second, you may have heard that lowering your origination cost is the one sure option you have for lowering your member's mortgage rate. Itâ&#x20AC;&#x2122;s true. There are only a handful of variables that are used to calculate the mortgage rate your credit union presents to its members. The one, single variable over which all lenders have the most control is cost-to-originate. Fine-tuning your lending operation is the one sure way to control this variable. Need assistance analyzing your operation and getting it fine-tuned? Visit the SMS Consulting website at www.consultsms.com to learn how we can help you.

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Strategy 7:

Credit Unions To The Rescue Credit unions differ from all other lenders. There's no disputing that. We didn't participate in the sub-prime Olympics nor did we put members in harm’s way. Members were and are affected nonetheless. So are our credit unions. We can help. If you haven't done so already, it's time to establish a sub-prime rescue program. Design a program, create a set of portfolio products and identify members who need help. In some cases members will identify themselves through delinquent car, home equity or credit card loans. The origin of their difficulties may well be an inappropriate first mortgage loan.

Want More? The CU Housing RoundTable published a White Paper in 2008 entitled ‘Post Sub Prime Housing Finance’. It contains many useful suggestions on creating a mortgage relief program for your credit union.

Another way of locating members in need is through Prime Possibilities. We can tell you the where, when and how of every one of your home owning members’ financing arrangements, plus other helpful information. This highly targeted marketing tool has many uses beyond sub-prime rescue, yet this is a terrific way to get acquainted with this valuable service. A note on creating sub-prime rescue products. By no means are we suggesting imprudence. A sad fact of the current crisis is there are members no one can help. Those we can, though, require a thoughtful, risk-based approach. Reserving against these loans at a higher level is also wise. Lastly, the CU Housing RoundTable produced a White Paper in 2008 on Sub-Prime Rescue. Visit the website at www.cuhousingroundtable.com.

Did Ya’ Know…

...what have become known as sub-prime loans were, in part, developed for financially sophisticated borrowers with special cash-flow, tax and estate planning, and other needs beyond those of the typical, conventional borrower in need of a conforming loan. Are they gone forever, the ‘no-income / no-asset’ (NINA), the ‘no-income, no-asset, no-job’ (NINJA), pay option ARM and other loans like them? Many of them probably are, though some of the products used by sub-prime lenders can still be useful for a segment of your members. Loans like ‘interest first’ products may still have a place, but we predict they will be used judiciously. There’s a frightening trend emerging, though, among lenders. Since there’s no secondary market for NINAs, NINJAs and their ilk, some financial institutions are designing portfolio products with similar characteristics. Investors don’t like them now for obvious reasons and won’t like them in the future. Let’s not follow suit. Keep those portfolios safe and liquid.

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Strategy 8:

Focus on First-Time Buyers

Want More? Two CU Housing RoundTable White Papers will provide insights into serving firsttime buyers. ‘Reimagine Your Balance Sheet’ and ‘How to Appoint a Housing Czar’ both discuss products for Firsttime buyers.

First-time Buyers are a 'Two-fer' strategy: credit unions that embrace this strategy get a bonus. Here's how we figure it. Credit unions everywhere are looking for consistent, reliable sources of housing financing business. First-time buyers are a market niche tailor-made for credit unions. They're looking for information, education and convenience; three things at which we excel. We're looking for long-term member relationships. Once members become homeowners, their financial service needs blossom. Consequently, it's a perfect match. We'll close their mortgage, then proceed to help them with all their future needs. The other benefit, the second part of the 'Two-fer' strategy, is this: first-time buyers tend to be younger, in their twenties and thirties. Credit union membership, as we all know, is getting older and as people age they tend to borrow less and save more. If your credit union has a goal of lowering the average age of its membership, then adopting a first-time buyer strategy is completely complementary. As you begin work on your first-timer strategy, review Strategy #4: Fine Tune Your Product Mix. Affordability products will be important.

Strategy 9:

Focus on Niche Markets Strategy #8 talks about first-time homebuyers as a core lending strategy for all credit unions. Niche Market lending is another such core strategy you should consider.

Want More? Curious about the demographics in your communities? Visit the City-Data website at www.citydata.com.

What do we mean by Niche Markets? It will be different for every credit union, and it depends on the community(ies) you serve. Affordable housing, for instance, may be a niche that meets a major membership need. Emerging market lending, a strategy Prime Alliance has been promoting for more than three years, may fit your membership well. For an excellent example of a credit union that has executed an outstanding emerging markets strategy visit www.primealliancesolutions.com/consumers.html to view the Consumers Credit Union Video. Consumers focuses on the Hispanic market, and their story is remarkable. The video will take less than five minutes of your time; the best, most strategic five minutes you'll spend today. Credit unions have always been niche lenders. By another name we know niche marketing as SEG marketing or service to our sponsor groups. While the world has changed since the days of single SEGs, the concept remains the same. So does the execution. We've been exceptional at niche marketing since the 1930s. Let's show our competition how it's done.

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Strategy 10:

Be THE Expert Members and potential members are seeking trustworthy lenders, lenders that are reliable, that provide affordable, sustainable financing. That's the definition of a credit union.

Want More? See Prime Alliance’s new Mortgage Awareness Program at http:// www.mortgagest artshere.com/

It's time we position ourselves as our community’s local housing and finance expert. This may not be as difficult as it seems. Start with your local media. Newspapers, radio and TV stations are always looking for opinion pieces and for knowledgeable industry experts to speak on timely topics. Mortgage lending is top of everyone's mind. Pitch story ideas such as mortgage relief Strategy #7, Government Lending Strategy #14 and First-time Homebuyer Education Strategy #8. The same topics will be of interest to the Real Estate Community, the Chamber of Commerce, The Rotary and other community groups. Now is not the time to be shy. Pitch your story, be ready, be flexible and be informative. Before too long, your credit union will become the recognized local expert.

Did Ya’ Know…

...sometimes asking a question is more useful than suggesting a solution. So here’s the question: how did credit unions come to be known as the best auto lending deal in town? We don’t have the answer, although we do have some hypotheses. Rather than share them, though, we’d like to hear your thoughts. Seems to us within the answers to this question lie some remarkable, valuable insight that will help us become known as the best mortgage lending deal in town. Share your thoughts on the Eighteen Strategies Blog at www.18strategies.com. Some of the ‘Two-to-Ten’ answers we seek will emerge from our collective thoughts.

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Strategy 11:

Time To Go Paperless Fully electronic, completely paperless mortgage lending is here. Prime Alliance lenders are some of the very few who can easily make the transition. Why paperless? Three reasons. First, fully electronic lending keeps every party to the transaction fully informed in real-time. Credit union staff, whether in the main office, at a branch, working from home or away at a conference, are never out of touch, never wondering what happened with a particular loan, never questioning what to do next. Members find themselves in the same, informed position. "Is my appraisal finished?," is now a question you've answered before it's asked. Mortgage lending, once an informationstarved process, is now information-rich. Everyone's up-to-date in real-time, on their terms. Go paperless for this reason alone.

Want More? Prime Alliance will be publishing more on the ‘Paperless Experience’ in 2009. Look for news at www.primeallian cesolutions.com.

The second reason, of course, is the greater efficiency, lower cost and better member experience that underlies keeping everyone fully informed. Electrons move faster than paper, always have, always will. Paperless lending will have you closing loans faster than you ever imagined. Finally, paperless lending is environmentally friendly. Traditional mortgage loans consume three to five pounds of paper each. While this is an overly simplistic statement, every 600 loans we close devours 17 trees. Make your plans to go paperless with Prime Alliance's RLC and LFC. If you have them both, all you need to do is name a project team and engage the help of your PA Customer Care Team and Fannie Mae. Not using the LFC just yet? Contact your account executive today.

Did Ya’ Know…

...Prime Alliance credit unions have distinct competitive service and efficiency advantages over all other mortgage lenders. In fact, you may be more efficient financing homes for members than you are originating auto loans. Think about that. We’re better at making home loans than car loans, the lending product we’re best known for. How should we use this to our advantage? Two suggestions. During the sub-prime crisis price was the perceived decision point for most borrowers. We say perceived because, as we know now, most overpaid for their loans. Price is still important, yet in the post sub-prime apocalypse, service matters more. The other suggestion: efficiency translates to cost savings. Some PA credit unions have reduced their origination costs by more than 60 basis points. Put some or all of that into your price. Better service and competitive pricing are a winning combination, one that always wins.

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Strategy 12:

Mortgage Literacy: The New Mantra One of the hardest lessons learned from the sub-prime crisis is this: the level of mortgage literacy in this country is abysmally low. How else could otherwise intelligent people end up in inappropriate loan products they couldn't possibly afford?

Want More? We think itâ&#x20AC;&#x2122;s time to re-design Homebuyer seminars. Look for more information soon.

Credit unions were chartered to promote the responsible use of credit. While our education mission has always been important, the stakes have never been higher: people are losing their homes. Let's re-commit to member education, this time emphasizing housing finance. Members, and your communities, will thank you for it in the form of increased mortgage business. This strategy dovetails nicely with Strategy #10: Be the Expert. Providing education that will help members make wise decisions is another way to position your credit union as a local expert.

Strategy 13:

Establish Community Housing Relationships Strategy #3: Appoint a Housing Czar emphasizes 'uncocooning' the mortgage department. Establishing community housing relationships is a second strategy to expand our lending horizons.

Want More? SMS University is currently exploring ways in which credit unions should go about establishing local housing relationships. Look for more information at www.consultsms. com in 2009.

Thinking about it, the mortgage transaction is a secondary transaction, one small yet essential piece of the main event: the purchase of a home. It begins before we get involved and continues long after. Being exceptional lenders requires clear knowledge of the environment in which we're operating. Working with local agencies gives us a window into the needs, challenges and opportunities of our local housing market, valuable insight we must have as we define our strategies and structure our mortgage programs and products. Where to start? Local governments are often a good place. Housing is important in every community. It's a political issue everywhere because housing has been a national housing policy priority since the 1940s. City Hall should welcome your inquiries, especially with the type of lending help credit unions offer. They will also be able to put you in touch with local groups that have housing as either their primary or partial mission.

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Strategy 14:

Government Lending, Everyone? The older Prime Alliance Team Members remember Government Lending. Not well, mind you, it's been some time since anyone's done much of it, and we are, well, getting older. Government Lending, FHA Lending specifically, is hip, it's happening, it's big. Some industry experts put FHA volume at as much as 30% of all lending in under 18 months. You've got to get ready. Yesterday.

Want More? Visit www.consult sms.com for the latest information on how Prime Alliance Solutions, Inc., can prepare your credit union to be the best government lender in your community.

What do you do? Three things concurrently. Get educated. Visit SMS Consulting’s website at www.consultsms.com for information on the latest sessions and webinars available on this topic. FHA lending is more involved than conventional lending, and you need to know the facts on being an originator. While getting educated, start the FHA approval process. The process isn't as arduous as it once was, yet it will take some time. Don't wait; contact HUD today at www.fha.gov. And, as soon as you've done that, partner with an FHA Lender that can give you a jump on Government Lending. There are many fine organizations that can help, including CU Members Mortgage. Contact your account executive today for more information. Still not sure Government Lending is for you? Consider this: former hard-money lenders, the sub-prime guys who refuse to give up, are turning their attention to FHA Lending as one significant way to replace the business they've lost. Don't let them get the jump on you.

Did Ya’ Know…

...the Federal Housing Administration (FHA) was created in 1934 through the passage of the National Housing Act, one of the Government’s responses to the Great Depression and the resulting banking crisis of the early 1930s. Prior to 1934 mortgage loans were short-term in nature, did not amortize and were callable. Consequently when the stock market collapsed in 1929, banks called many mortgage loans which resulted in a drastic rise in foreclosures. FHA Lending was designed to prevent a similar crisis from happening again. Here we are, 78 years later, and Government Lending is once again coming to the rescue of many homeowners. It’s more than that, though. Federal Housing Administration Loans improved affordability then as today, proving everything old is new again.

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Strategy 15:

Partner with the ‘Influencers’ We call this the 'Strange Bedfellow' strategy. Like Strategies #3 and Strategies #13, this, too, opens our mortgage lending cocoon to the broader world, into the primary transaction in which we hope to play a role for all members. Realtors, builders, estate planners, and accountants all influence where our members finance their homes. Precious few of them think credit union when they think mortgage.

Want More? Prime Alliance Real Estate Services will be publishing more on creating relationships with the Real Estate Community during 2009. Watch for the news!

The single biggest influencer is the Real Estate Community: Brokers, Agents, Realtors. Once they begin working with a buying member, the member is commonly in their thrall. Putting the Real Estate Community under a spell of our own should become a primary objective for every mortgage lending credit union. It's not as simple, though, or as immediate as magic; however, these relationships take time, months in fact, to take hold. Begin working with your local Agents now. It will take 18 months for the relationship to blossom. We know of a few credit unions who made the commitment. Their Real Estate channel now accounts for as much as 15% of their monthly business. Unsure how to begin? Talk with Shiela Finley shiela.finley@ PrimeAllianceRES.com, EVP, Prime Alliance Real Estate Services. PARES can help you build your 'Strange Bedfellows' strategy very quickly. Don't forget builders and other influencers. Look for more information on creating these relationships later this year.

Did Ya’ Know…

...many Real Estate Brokerages have their own mortgage lending operations? It’s true. What’s also true is this: less than 20% of real estate transactions conducted by firms with their own mortgage operations are actually financed there. Realtors work with financing sources they know will perform. While they have options close to home, these statistics prove other lenders have ample opportunities to earn their business. The right product mix as well as competitive rates are table stakes: you must have them to begin a conversation. Where credit unions really shine, though, is service. No other lender offers the financing experience you deliver every day. Realtors share your goal: make sure the member closes as quickly, easily and as affordably as possible. Reach out to your local Real Estate Community; they’re looking for lenders just like you.

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Strategy 16:

Participate in the CU Housing RoundTable

Want More? Visit the The CU Housing Round website at www.cuhousingr oundtable.com

Ever have the feeling you are too busy “doing” to really, truly, think about what you are doing, and maybe should be doing? Us too. This is one of the main reasons we formed the CU Housing RoundTable. Credit union mortgage lenders need time to think—together—about those strategies we should pursue that will help put more members in homes more affordably. Putting more members in homes also moves us closer to 10% market share within the next seven years, the RoundTable's Big, Hairy Audacious Goal. How will participation in the RoundTable specifically help your credit union? By focusing us all outward and forward, on the broader industry, on the remarkable opportunities that lay ahead, on issues important to members, on strategies that will help our credit unions thrive. Credit unions have always done their best thinking together. The Housing RoundTable focuses our collective intelligence on housing finance, the next great frontier of credit union lending. Expanding horizons and boundaries is the primary task of all Think Tanks, the CU Housing RoundTable included. Think Tanks work best when the best minds participate. Volunteer to help write a white paper. For more information visit www.cuhousingroundtable.com.

Strategy 17:

Practice Highly-Targeted Marketing

Want More? Prime Possibilities, a highly targeted marketing tool Prime Alliance offers in conjunction with MGIC, will tell you with great certainty which of your members will be financing or refinancing homes, and when. Contact your Prime Alliance Account Executive for more information.

It's astonishing with all that's happened to the mortgage markets in the past 12 months that members, Realtors, builders and our communities remain unaware that credit unions are some of the most stalwart lenders in the industry. It’s time to change that. Past time, in fact. First things first. Standard awareness advertising, where we market general messages to the general public, is not enough. We must begin engaging in highly targeted housing finance marketing campaigns to those members we know to be homeowners. Not only can we know who among them own homes, we can z who they financed with, the type of loan they have, the interest rate they are paying. With this almost perfect knowledge, we can put an almost perfect, custom offering in front of every one of our home owning members. Prime Possibilities, offered in collaboration with MGIC, is the solution for this highly targeted activity. Second, it's time we market ourselves to the Real Estate Community and other transaction influencers. Strategy #15 addresses this very need. Creating awareness of our capabilities while establishing relationships with those that influence our members’ financing decisions is absolutely essential to our long-term success as mortgage lenders.

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Strategy 18:

Affordable Housing, The Next Frontier When the dust finally settles after the sub-prime Olympics, we'll find ourselves right back where we were two years ago. Affordable housing is a significant national issue, one that's given short shrift of late given market woes.

Want More? It’s entirely possible the CU Housing RoundTable may take up the issue of affordable housing for its fourth annual meeting in 2009. Watch the website for more information.

Affordable housing is another niche we can claim as credit unions, especially while other industry lenders are licking their wounds. Developing an affordable housing strategy requires a keen understanding of your community’s housing needs, local age, wage and cultural demographics, and relationships with those that understand the issues and influence affordable housing decisions. Many of the 17 strategies that precede this one provide the foundation for an affordable housing strategy. That's why this one is purposefully Strategy #18. By now you've appointed your Housing Czar, or you’re close to doing so. As the Czar is making connections, establishing relationships and developing plans, make it understood that affordable housing is an essential part of your credit union's long-term housing plan.

Did Ya’ Know…

...the stated goal of federal housing policy is "a decent home in a suitable living environment for every American family." As a nation, though, we have never come close to achieving this goal. The affordable housing challenge in the United States is nothing new. Small groups of credit unions throughout the country have been addressing the need for years. Prime Alliance cited affordable housing as a credit union strategy more than three years ago. Affordable housing is not so patiently waiting its turn for attention, as it has for decades, eclipsed for the moment by the market’s attention to the issues created by the sub-prime debacle. When the last liar loan is either paid off or foreclosed, helping low- and moderate-income members tackle their toughest economic challenge, housing, will be the next big opportunity for credit unions to make a difference in the lives of members who need it most. Have your Housing Czar begin his or her research on the affordable housing needs in your community now. You’ll want to be ready in month 19 for a set of strategies that address our federal housing policies.

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