SELCO CU partners with Frontier Investments to offer mortgage-backed securities

EUGENE, Ore. – As the popularity of real estate-related investments continues to swell, one credit union is counting on its established relationship with a family-owned business to offer such options to its members. SECLO Credit Union recently acquired Frontier Investments Co., one of Oregon’s oldest issuers of mortgage-backed securities. The affiliation, not new since both have been doing business together since 1998, allows SELCO to continue meeting the unique needs of its growing membership which currently spans the state’s two largest counties, said Ava Milosevich, SELCO’s president/CEO. “This move continues to help us differentiate ourselves because the banks have the power to bring in insurance and financial planning,” Milosevich said. “We’re in growth mode and we have to continue to meet the financial needs of our members.” Chartered in 1936, SELCO has 65,000 members and $432 million in assets. Frontier Investment Co. has been around since 1978 operating divisions in mortgage banking, retail banking and mortgage-backed securities. The acquisition will be virtually unnoticed by members, investors and customers with Frontier remaining at its present location and keeping all 43 employees, said Mark Dent, Frontier’s president. SELCO will pay taxes on profits from Frontier because the services the company provides will be available to members and the general public, Milosevich said. “Growing the two organizations together was a timely and powerful strategic move,” Dent said. “The people of SELCO and Frontier share a common sense approach, a passion for what we do and a genuine concern for our customers and members.” That concern is why the alignment aims to help the discerning investor looking for stronger returns. Indeed, issuers of mortgage securities are typically very selective in choosing the mortgages, which make up their pools. Beyond the basic security of the mortgage loans themselves, mortgage securities issued and/or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac carry additional guarantees, which enhance their creditworthiness. Typically, investors in mortgage securities have included corporations, commercial banks, life insurance companies, pension funds, trust funds and charitable endowments but in recent years, individual investors have been drawn to the investments because of attractive yields and a diversity of choices. With more than $2.3 trillion of mortgage-backed securities in the marketplace today, according to Freddie Mac, few would deny that mortgage securities command a prominent place in residential mortgage finance. “It’s really not rocket science,” Milosevich said. “We offer the MMA’s and CDs but members who are investors – meaning they aren’t necessarily depositing into the credit union – are looking for better returns.” SELCO is among industry pioneers in the investment arena launching its CUSO in 1982 and offering financial planning in 1984. In 1995, SELCO also formed a lease CUSO with other credit unions at one point offering cellular telephones to members through its communications division. In 1998, SELCO formed SELCO Mortgage Co., partnering with Frontier to beef up its loan options. SELCO was recently named by Oregon Business as one of the “Top 100 Best Companies to Work For” in the state for the fifth consecutive year. The credit union placed eleventh among companies with under 250 employees in Oregon, and first in Lane County, where SELCO is located. -