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WASHINGTON – After working in the financial services industry since 1983 including with some banking bigwigs like CitiGroup, Mercy Jimenez knows all about the importance of having points of differentiation and being able to offer a value proposition. Now as senior vice president of Fannie Mae and acquainted with working with credit unions, Jimenez said as the purchase mortgage market continues to emerge, credit unions need to face some harsh realities, figure out ways to deal with them, and find ways they can leverage points of differentiation unique to credit unions to increase homeownership among members, increase the size of their mortgage portfolios, and gain market share. According to Jimenez, there are three “eye-popping” housing marketing realities credit unions must accept if they hope to increase their share of the mortgage market, but which she opines “credit unions aren’t well-positioned to capitalize on.” They include: housing is the primary wealth builder in the U.S.; the biggest demand for housing will come from the creation of minority households; and the peak homeownership rate is with the 70-year and older population. Add to that, offers Jimenez, is the fact that only a third of credit unions originate mortgages, and the top 10 originators own 61% of the market-and none of those are credit unions. “Credit unions haven’t learned to capitalize on the eight points of differentiation that serve them well,” she says. “The bridge to changing members’ perceptions of their credit unions not being mortgage lenders is in credit unions realizing these points and making them work for them.” Jimenez’s eight points include: * CUs are associated with a high sense of service to members. * CUs are driven by a value contribution to members. * CUs have a high sense of teamwork, see each other less as competitors and are willing to share what they learn “for the good of all.” * CUs like to say “yes” to members. HMDA data show credit unions’ approval rating by members is 10% above other financial institutions. * CUs are associated with being “authentic” by their members. Members have more confidence in credit unions than in other financials. Forrester Research shows 70% of members think CUs act in members’ best interest. * CUs are not always after short-term gains * CUs typically don’t “sell-off” members by selling the servicing on mortgages. * CUs are more patient in engaging members for the long term. They don’t shy away, for example, from offering educational programs for first-time homebuyers or credit counseling workshops. “Credit unions don’t realize how easy it is now to offer mortgage lending. There’s so much technology and ways credit unions can partner with other credit unions or work through CUSOs without having to have the infrastructure to do mortgages themselves,” says Jimenez. But to be successful at it, she adds credit unions have to understand the market they want to reach and be able to penetrate it. “Credit unions can think incrementally with small tactics or think really big and strategically. They have choices,” says Jimenez. “They can passively respond to housing finance developments or aggressively differentiate themselves and lead in select areas,” she adds. “A credit union should be appealing to the member’s sense that you advocate for their best interest, that the credit union is going to take the time to put them in the right kind of financial product and not sell the servicing on their loan. Not enough of those facts are getting across to members.”

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