DURHAM, N.C. — The $60 million Latino Community Credit Union has taken another step in favor of serving its primarily immigrant membership in the face of a negative economy by offering fixed-rate mortgages.
The young and very rapidly growing credit union serves a primarily immigrant membership in North Carolina.
Latino Community CEO Luis Pastor acknowledged that this could seem a bad time to step into the mortgage market, but countered with the observation that the CU has been making adjustable-rate mortgages for some time with very low delinquency and charge-off rates.
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NCUA data confirmed his assessment. According to the CU's Call Report, Latino Community has 253 ad-justable-rate first mortgages on its books worth just over $24.4 million. Latino made 82 of the loans worth roughly $8.3 million in 2007. The CU's losses on its total loan portfolio was listed at only $34,000 for the year.
"There is nothing inherently more risky about our service to an immigrant market," Pastor said, adding that the CU had decided to begin offering fixed-rate mortgages in response to member demand for them.
The fixed-rate mortgages will finance up to 90% of the value of the home and offer terms of 15, 20, 25 and 30 years. "We are very excited to introduce the fixed-rate mortgage program to meet the needs of more of our members and help them realize their dream of owning a home," said Javier Olave, vice president of mortgage loans.
With the addition of fixed-rate mortgages, Latino Credit Union has a fuller portfolio of mortgage products. Members can now choose between fixed-rate and adjustable-rate mortgages at competitive rates, Pastor explained. "The real issue is being able to offer our members the range of choices they really need," he said.
Pastor explained that the CU would continue to hold the loans on its books and had established a $5 million cap for the fixed-rate product, partially because some of the loans do not conform to the requirements for the secondary market and partially because Latino wanted to keep the control of the loans.
"We have a long history of people telling us that we wouldn't be able to do something that we then have gone ahead and done," Pastor said. "They said we couldn't make $15 million [in assets] as fast as we did, and we did it. They said we couldn't reach $30 million or $45 million, and we did. Now we are an almost $60 million credit union, so we have some experience at doing all this."
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