MCLEAN, Va. - Credit unions selling mortgages on the secondarymarket to Freddie Mac can now count on additional support from thehousing government sponsored enterprise through a newly launchedinitiative. Freddie Mac has been ramping up over the last severalmonths the development of a dedicated sales group exclusively forcredit unions within its larger single family sourcing group, andnow the team has been given the go-ahead to work with credit unionsto become better originators in the purchase mortgage market and tohelp them better understand interest rate risk and mitigate risk intheir balance sheet management. Leading the management team areFreddie Mac's Illiana Ghanem, vice president, community lending;Susan Stein Lascko, business management of credit union segment;David McCraw, director of sales; and Jocelyn Brooks, accountmanager. But they emphasize "there are dozens of people behind us"including Freddie Mac staff from marketing, communications,training, pricing and servicing. Lascko said the housing GovernmentSponsored Enterprise's decision to form the group was prompted byseveral factors, one of which is the increasing size of the creditunion sector for mortgage originations. In addition, she explained,"it's part of Freddie Mac's strategy to diversify the number oflenders it does business with and to grow its volume of mortgagessold on the secondary market by doing business with more lendersrather than doing more business with fewer lenders. "It's part ofour strategy of diversification," she said, adding that, "This isthe cornerstone of a multi-year plan to have very specialized anddedicated resources devoted to like-customers. Credit unions aredistinct enough to deserve to have these dedicated resources."Lascko has been with Freddie Mac for 15 years and for the last fiveyears has been an account manager focused on the Western part ofthe U.S. working with a group of 40 credit unions such as AmericanFirst CU, Mountain America FCU, Fresno County FCU and Twin CountyCU. "The country has gone through a huge economic refinance boomand is now in a purchase market. Credit unions are looking at theirmember base and wondering how to penetrate that base. Theyrecognize that mortgage lending is an anchor product, they realizethey need to broaden their lending base," she says. "We're workingto eliminate the perception among consumers that credit unions arebad purchase originators," Lascko adds. Ghanem, a 14-year veteranof Freddie Mac, points out that the majority of credit unions stilldon't offer mortgages. "That means that the ones that are engagedin the product have to work that much harder to increase memberawareness." However, she stressed that "credit unions are gettingmore comfortable with mortgage lending daily and boards arerealizing the fee income potential mortgages have" as a result ofcross-selling opportunities. She said the average number ofcross-selling opportunities derived from mortgages is fivedifferent products and credit unions can realize that because ofthe "host of knowledge of a particular member's financialsituation" that's derived from funding a mortgage loan. But McCrawsays Freddie Mac's strategy goes beyond simply making a marketingeffort. "We want to drive that down to the point of sale. We wantcredit unions to be as comfortable selling a mortgage package tothat member as any other loan officer on the street is," he says.In designing a credit union mortgage marketing plan, McCraw says,"The more we can provide credit unions that is ready-to-go, thebetter, that is giving credit unions a product that has features,benefits and guidelines that can be put on a template and stampedwith the credit union's name. Credit unions in particular need thatlevel of assistance and production to get the ball rolling. "Bankshave been engaged in mortgage lending for decades and they tend tohave larger staff and be more self-sufficient. Most credit unionsare new to the mortgage industry and have greater needs," he added."This represents a whole new business strategy for many lenders, sothey need training, education and marketing outreach." As themortgage market continues to transition from a refinance to apurchase market, many credit unions are being asked by their boardshow can their credit union enhance its services to capture themortgage volume. Lascko said a lot of that ability has to do witheducation materials. "It's not enough for a credit union just toquote a member a mortgage rate. It's more important to determineand assess that member's needs. A credit union never wants to sayno to a member, so we want to help the credit union find theproduct that's right for that member. We're opening the window togive credit unions access to more information about mortgagelending. We're giving them a comfort level to be able to speak withtheir boards about the credit union's mortgage lending strategy." Alot of that strategy has to do with leveraging the secondary marketto assist in asset and liability management, something she says alot of credit unions during the refinance boom weren't able to dobecause they didn't have the resources to navigate through and selltheir mortgages on the secondary market. As an indication ofFreddie Mac's commitment to working with credit unions, in lateJune, 10 Freddie Mac senior management staff met in Chicago at aCredit Union Advisory Board meeting for two days withrepresentatives from 26 credit unions from throughout the U.S. togain feedback and guidance on what Freddie Mac can do better tohelp credit unions meet the mortgage market challenges. CarlosMiramontez, VP of lending, American First CU was among the creditunion attendees. He said while the annual meetings typicallyfeature some senior management staff from Freddie Mac, "the factthat there were so many more of them at this latest meeting was anindication of their interest in wanting to get to know us better,and it gave us the opportunity to talk directly to them about ourneeds and concerns." Among those concerns, said Miramontez, iscredit unions' need to get more competitive pricing selling on thesecondary market. "Credit unions are often behind the curve onpricing because we have a lower volume than banks. But we wanted tolet them know that while our volume may be lower, the creditquality of our loans is better and that should reflect in thepricing credit unions get." In addition, he explained, because ofcredit unions' field-of-membership, members often have specialneeds that require credit unions to offer customized products tomeet a particular market's needs, regardless if those products aresaleable on the secondary market. "Credit unions want Freddie Macto be more flexible with the products credit unions hold in theirmortgage portfolio," said Miramontez. "If the secondary market wasmore flexible, credit unions would be able to generate more loans,"he added. Miramontez said Freddie Mac has been very receptive tocredit unions' suggestions, and the company is even in the processof completing an analysis of credit unions' loan portfolio to seewhere there are opportunities to give price or credit wavers. TheAmerican First CU executive is thrilled with Freddie Mac's newcredit union group because "it will help credit unions get qualityservice. Before credit unions felt they were playing second fiddleto other lenders. Freddie Mac's heart was in the right place toservice us better, but before they organized the dedicated creditunion group they didn't have the focus or manpower to do that."Lascko said Freddie Mac's commitment to credit unions is long term."We recognize that longevity is very important. It's not all aboutFreddie Mac, it's our commitment to the credit union industry," shesaid. -

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