Mortgage Crisis Aside, VyStar CU Moves Forward with Real Estate CUSO
JACKSONVILLE, Fla. -- On the surface, it would appear that opening a real estate CUSO--in Florida of all places--might not be the best move now given the current mortgage market upheaval.
But VyStar Credit Union is optimistic that the timing of the March launch of VyStar Real Estate Services could not be better, said Terry West, president/CEO of $3.3 billion VyStar CU. The new CUSO has been in the works for more than a year and a half.
"We had already planned to do this before the mortgage crisis became an issue," West said. "What has come out of the crisis is identifying a need and members knowing who to do business with. They can say 'yes, I know them.'"
Florida, California, and Nevada are among the states that lead the nation in foreclosures, according to the Mortgage Bankers Association. The housing downturn is expected to hit bottom around the third quarter but Florida may not see a turnaround for another three to six months after that because of high foreclosure rates and an oversupply of condos, the association said. Florida is also home to the construction loan scandal involving Norlarco CU.
All those obstacles aside, VyStar Real Estate Services has members already waiting in the wings, West said. The CUSO is one of three entities that operate under the VyStar Financial Group, LLC umbrella. The group also offers VyStar Title Agency and insurance.
Members and non-members will be able to list their residential real estate on the CUSO's Web site, which will go live in March. One broker and four agents will also assist with marketing. West said they want to start out small. Each agent will cover Clay County, Mandarin, Westside and Northwest Jacksonville. The areas are home to the largest concentrations of VyStar members with Westside and Clay County topping the list. The average home cost for VyStar members is a little under $300,000, West side. The plan is to start in areas where members buy in that range, not in the more affluent areas.
"We had already done mortgages for years," West said. "We now have the concept of helping people find a home, finance a home and hopefully, closing a home with us."
Getting the word out is the biggest piece of the CUSO's launch. After a soft rollout in March "to work out the kinks," VyStar will provide more outreach through its monthly newsletters and on its Web site (www.vystarcu.org) and through a larger media campaign in the second or third quarter of this year.
West suggested credit unions considering launching a similar CUSO ensure all regulatory and compliance requirements are met. Having a title agency makes it that much more prudent.
"Make sure to check all your boxes, dot all your i's and cross all your t's," West said.
Appealing to first-time home buyers is one of the CUSO's goals.
"When I bought my first home, I was scared to death," West said. "Buying a home is one of the biggest decisions you will make in your life. We want to make sure we can help with that process."