Fort Bliss FCU helps put mortgages in low income and military members' hands
EL PASO, Texas - Home buyers in El Paso and Dona Ana counties who otherwise would be turned down for conventional mortgage financing because of a lack of credit or past credit problems are finding financing assistance these days at Fort Bliss FCU. The $318 million credit union is participating in Fannie Mae's Expanded Approval program for mortgage loans in the two counties. Fort Bliss has five branches in El Paso and Las Cruces. The El Paso branches serve the financial needs of active military and civilians assigned to Fort Bliss, Biggs Field, and William Beaumont Army Medical Center, as well as retired military. FBFCU's two Las Cruces branches serve the financial needs of all residents of Dona Ana County, many of whom are teachers and farmers. Fort Bliss FCU has more than 67,000 members. FBFCU Vice President of Mortgage Lending Judy DeHaro said prior to the credit union's introduction of the Expanded Approval program the CU was turning away about 40% of the mortgage applications it received because there was no flexibility with the types of loans Fannie Mae approved - applications either came back as approved or `referred with caution' which DeHaro said "essentially was a reject." Since implementing the program, DeHaro said Fort Bliss has been able to give mortgage loans to those members who are approved by Fannie Mae but also those who are levels 2, 3 and even 4 (`refer with caution'). "The debt-to-income ratio is more liberal with the program. We may still make the loan to the lowest level of borrower depending on their circumstances, but we'll keep on our portfolio and won't sell it to Fannie Mae. Mortgage loans approved under the Expanded Approval program are risk-priced. The interest rates the loans are approved at-about 1.5 to 1.75 percentage points above par than the rate the credit union offers for A paper borrowers, depending on whether the mortgage is for 15 or 30 years-are still lower than those offered by other high-risk mortgage lenders, and the credit union is able to tailor the loan to the borrower's financial situation. "We've seen a lot of members who otherwise would have received a `referred with caution' from Fannie Mae and been turned down for a mortgage, receive one because of the loan approval program," said DeHaro. "It gives us the ability to essentially tell someone who's had credit issues in the past that we're willing to take the risk of giving them a mortgage loan at a higher rate, even though they don't fall into the elite group of A paper." DeHaro recalled a recent incident when a member who had been 60-days delinquent in the past year applied for a mortgage and was approved. "Being a lender, you get used to doing things a certain way. This program is teaching us a new way of looking at and processing mortgage applications," she said. Fort Bliss FCU has $60 million in its mortgage portfolio. It began selling mortgages to Fannie Mae less than a year ago and has already sold about $8 million in mortgages.