The NAFCU Journal September-October 2019 - 28

''

By doing the things we do,
we're able to make such a big
impact on people's lives.

''

- PIA PALPAL-IATOC GUTER, VICE PRESIDENT OF MARKETING,
MERIWEST CREDIT UNION

one or two key features of each individual offering that make it stand out and
show its relevance to a given member,
or group of members, at their particular
life event or stage of life."
Meriwest crafts its unique offerings,
such as San Jose Sharks-themed debit
cards that allow fans of the community's pro hockey team to show their
support, to "be a part of the community,
to engage people and support them in
wherever they are in their life stages
and lifestyles, while bringing the credit
union's lower rates and higher returns,"
Pender says. "We serve them both from
a financial perspective and as a member
of the community."

First-Time Homebuyers

In the San Jose area, the median home
value is just over $1 million. The median
household income, however, is $114,400.
In this lopsided market, Meriwest
targets those who struggle to save for
down payments but still dream of owning a condo or townhouse, says Anita
Domondon, Meriwest's vice president
of mortgage. Teaming with an affordable housing partnership and with the
California Housing Finance Agency,
Meriwest crafted loan packages that
are unique to the region. By pairing
mortgages with down-payment loans,
buyers can close on price-capped
homes with down payments of as
low as 2 percent and no private
mortgage insurance.

At Marine FCU, one popular mortgage program has struck a chord with
first-time buyers. A 30-year mortgage
finances 80 percent of the purchase,
while a second mortgage covers
28

another 15 percent for 20 years.
Buyers bring the remaining 5 percent
down payment.
"If a young couple is interested in buying
a fixer-upper, they can get into it with a
relatively small down payment," Clark
says. "By the time they're ready to deploy
in about three years, they've got a handy
little piece of equity."
Such enticements are "most definitely"
good for the credit union, he says. "We're
a cooperative. Anytime a credit union
does well, that means all the members
do well."

Housing Finance Reform

Homebuying is one of life's biggest
events, and credit unions are uniquely
positioned to deliver the blend of
financing, education and support
that ushers homebuyers into the next
phase of their lives. Unfortunately,
an uneven playing field could hinder
credit unions from building robust
loan portfolios and extending
competitive rates. Many credit
unions rely on selling mortgages
in the secondary market to maintain
liquidity, but housing finance reform
under consideration by Congress
could restrict market access,
especially through Fannie Mae
and Freddie Mac.
NAFCU is speaking up for fairness,
advocating for continued access and an
end to size- and volume-based pricing
that fails to recognize the sterling quality
of credit union loans. If perpetuated,
restricted access and unfair pricing could
diminish liquidity, drive up rates and
hamper the ability of credit unions to
originate future mortgages. 

"We appreciate the work that NAFCU
and other organizations across the
country are doing to advocate for the
well-being of the credit union movement," Rudolph says. PSECU, a Fannie
Mae seller-servicer, sells mortgages on
the secondary market when financially
beneficial, he says. The credit union
prices its loans according to Fannie
Mae's buy rate, aiming to "always price
our products in the way that serves our
members' best interests."
Marine FCU is a "healthy-sized" institution but "just not big enough for Fannie
Mae or Freddie Mac to do anything with
us," Clark says. To strengthen its portfolio and access the secondary mortgage
market, he says, Marine FCU is seeking
appropriate partners that are "likeminded in definition of credit quality,
with an offering that is relatively unique
but close to what we're offering, so it's
not such a stretch."
Accessing the secondary market, Clark
says, would be "just another tool in the
bag to be able to move money and create some more income we can use for
our membership." He "wholeheartedly"
agrees with NAFCU's stance that loan
quality should carry as much weight as
loan quantity. "Credit unions can offer
a good booster shot of quality credits,"
he says.
Meanwhile, Meriwest easily accesses the
secondary market, but its challenge as
a relatively small lender in a high-cost
area is "volume as compared to the big
banks and big mortgage aggregators,"
Domondon says. Receiving lower-cost
pricing for high-balance loans depends
on a proportionate volume of conforming loans delivered.
"For mortgage market players who deal
in billions of dollars of production, this
is a market advantage," Domondon says.
"Pricing based on loan quality makes
sense and will allow small lenders and
credit unions to compete on a more level
playing field."
M. Diane McCormick is a freelance
journalist based in Harrisburg, Pa.

THE NAFCU JOURNAL SEPTEMBER-OCTOBER 2019



The NAFCU Journal September-October 2019

Table of Contents for the Digital Edition of The NAFCU Journal September-October 2019

The NAFCU Journal September-October 2019
Contents
Conferences
From the Chair
Washington and Industry Briefs
The Bottom Line
Access to Money
The Best Indirect Growth Strategy
Big Moments, Bigger Wallet Share
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
Industry Perspectives
From the President’s Desk
The NAFCU Journal September-October 2019 - The NAFCU Journal September-October 2019
The NAFCU Journal September-October 2019 - Cover2
The NAFCU Journal September-October 2019 - Contents
The NAFCU Journal September-October 2019 - 2
The NAFCU Journal September-October 2019 - Conferences
The NAFCU Journal September-October 2019 - From the Chair
The NAFCU Journal September-October 2019 - 5
The NAFCU Journal September-October 2019 - Washington and Industry Briefs
The NAFCU Journal September-October 2019 - 7
The NAFCU Journal September-October 2019 - The Bottom Line
The NAFCU Journal September-October 2019 - 9
The NAFCU Journal September-October 2019 - Access to Money
The NAFCU Journal September-October 2019 - 11
The NAFCU Journal September-October 2019 - 12
The NAFCU Journal September-October 2019 - 13
The NAFCU Journal September-October 2019 - 14
The NAFCU Journal September-October 2019 - 15
The NAFCU Journal September-October 2019 - The Best Indirect Growth Strategy
The NAFCU Journal September-October 2019 - 17
The NAFCU Journal September-October 2019 - 18
The NAFCU Journal September-October 2019 - 19
The NAFCU Journal September-October 2019 - 20
The NAFCU Journal September-October 2019 - 21
The NAFCU Journal September-October 2019 - 22
The NAFCU Journal September-October 2019 - 23
The NAFCU Journal September-October 2019 - Big Moments, Bigger Wallet Share
The NAFCU Journal September-October 2019 - 25
The NAFCU Journal September-October 2019 - 26
The NAFCU Journal September-October 2019 - 27
The NAFCU Journal September-October 2019 - 28
The NAFCU Journal September-October 2019 - 29
The NAFCU Journal September-October 2019 - Executive Spotlight
The NAFCU Journal September-October 2019 - 31
The NAFCU Journal September-October 2019 - Management Insight
The NAFCU Journal September-October 2019 - 33
The NAFCU Journal September-October 2019 - Compliance Central
The NAFCU Journal September-October 2019 - 35
The NAFCU Journal September-October 2019 - Inside NAFCU Services
The NAFCU Journal September-October 2019 - 37
The NAFCU Journal September-October 2019 - 38
The NAFCU Journal September-October 2019 - 39
The NAFCU Journal September-October 2019 - Industry Perspectives
The NAFCU Journal September-October 2019 - 41
The NAFCU Journal September-October 2019 - 42
The NAFCU Journal September-October 2019 - 43
The NAFCU Journal September-October 2019 - From the President’s Desk
The NAFCU Journal September-October 2019 - Cover3
The NAFCU Journal September-October 2019 - Cover4
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