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TUKWILA, Wash. – Considering that last year was the first time the two-year old Fannie Mae Credit Union Advisory Council (CUAC) set goals for itself for the upcoming year 2003, Joe Brancucci, the group’s chairman, has all the more reason to be proud that the group has accomplished all it set out for itself in 2002. Brancucci, who is also vice president-chief lending officer of Boeing Employees Credit Union and president/CEO of Prime Alliance Solutions said, “When CUAC was formed, the members asked themselves whether they wanted to just be the typical kind of `show and tell’ advisory group, or did they want to set out an agenda to accomplish? They chose the latter and have worked closely with Fannie Mae over the past year to realize our goals.” Of the four goals it set out for itself, CUAC defined as priorities: * developing an affordable housing/emerging markets/underserved research model using five case studies of CUAC members working together with Fannie Mae partnership offices; and * working with Fannie Mae to develop an affordable housing product that will be piloted by CUAC members in early 2004. Other goals of the group included: * working with various educational groups within Fannie Mae to help develop CU specific mortgage training materials; and * working with Fannie Mae to develop the content and structure of the eFanniemae.com, Credit Union site. CUAC was formed in 2001 as part of a Fannie Mae initiative and commitment to work with credit unions to increase the availability of affordable housing in the U.S. The group whose members were deliberately selected to cut across all sizes of credit unions, types of charter and geographic dispersion, meets twice a year in person – in Chicago in April, and Washington, D.C. in September – as well as communicates monthly via conference calls. “Bringing affordable credit to all families is a mission credit unions and Fannie Mae have in common,” said Sandy Cutts, senior media relations manager for Fannie Mae. “Credit unions are uniquely qualified to help us meet our goal of there being a trustworthy Fannie Mae credit provider for every family that wants a home. With the proliferation of predatory lenders who charge consumers exorbitant interest rates, there is an urgent need for this.” Cutts noted that Fannie Mae Chairman and CEO Franklin Raines referred to “the common bond Fannie Mae and credit unions share” and the housing Government-Sponsored Enterprise’s interest in expanding its relationship with credit unions when he addressed the NAFCU Congressional Caucus in September. Among Raines’ remarks, for example, he stated that “credit unions are uniquely qualified to help us meet this goal. Few other lenders have more loyalty, trust, and personal connection to their customers than you.” Defining their goals was one thing for CUAC’s members, but Brancucci said the group soon realized the real challenge was if they were trying to develop a product to deal with affordable housing, then how could they best communicate that product information to targeted markets? “It turned out to involve more than simply doing more advertising or marketing or just printing up a bilingual piece in a foreign language and running it in a newspaper,” he said. To learn more about emerging markets in the country and how best to reach out to them, CUAC conducted case studies in five cities and areas – Seattle, San Antonio, the New England area, Arizona, and Washington. The results were educational for the CUAC members. Members, for example, thought the case studies’ results would show the number one emerging market was Latino/Hispanic, followed by African-American, Native American, and lastly, Asian. In fact, the results showed the emerging markets in rank order starting at the top is the Asian market, followed by Native American, Latino/Hispanic, and African-American. “There are so many cultural differences that you have to consider when you create products to reach these markets,” said Brancucci. During 2003, CUAC worked closely with Fannie Mae on an affordable housing product which the group intends to begin piloting in early 2004. Details on the product were still confidential at press time, but Brancucci said it addresses downpayment and monthly payment affordability issues. CUAC also worked closely with the company in developing credit union mortgage specific training materials. Brancucci said the material includes all the basic course work credit unions need to familiarize themselves to the secondary market. The fact that Fannie Mae lent its expertise with the development of the material “reflects what Fannie Mae has to offer credit unions in mortgage lending,” said Brancucci. Even more important, he pointed out that the training material isn’t aimed at “just the $1 billion credit union shop, but to the most basic $30 million credit union. It gives these credit unions access to information on the mortgage market they might never have otherwide,” adding that the development of the training material is a work in progress. “We knew the refinance market would eventually end, and so our 2003 goals focused on building a longterm strategy so credit unions could be part of the purchase money market,” said Brancucci. “It’s a longterm investment. “The biggest issue in getting a commitment from credit union to mortgage lending is to make sure they understand the mortgage market and the risks that are involved,” he added. Brancucci explained that the 18 current members of the three CUAC teams – there were originally two more members, but they left their positions at their credit unions – have been in place for the last two years. With the anticipated early 2004 launching of the affordable housing product pilot, he said the team members will probably stay on another year. Looking ahead to 2004, CUAC has defined three goals for itself. Top at its list is expanding education and available information. In addition, the group wants to continue developing its affordable housing product, and continue developing investor channels for the affordable housing product. -

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