Federation Launches Center to Help CDCUs Offer More Mortgages

NEW YORK – The National Federation of Community Development Credit Unions has launched an initiative aimed at helping community development credit unions both offer more mortgages and sell the mortgages they have already made. The CDCU Mortgage Center, LLC has started with one million dollars from the U.S. Treasury’s Community Development Financial Institutions Fund and one million dollars from the Federation’s own resources. That core capital will be used in part to establish the Center and also to help CDCUs find secondary markets for non-conforming mortgages. “We consider offering mortgages a steadily more important part of what community development credit unions can do,” explained Cliff Rosenthal, executive director of the Federation. “Our goal through this program is to help build capacity among CDCUs for offering mortgages and helping their members through the mortgage process.” The part of the initiative which involves purchasing mortgages, particularly non-conforming mortgages, will get more under way in the fourth quarter of 2005 but the Federation wanted to highlight enrolling two well-known mortgage firms, CU Partners and PHH Mortgage Services, in the effort. CU Partners is an initiative of Stearns Lending that works with credit unions, and PHH Mortgage Services is the sixth largest mortgage originator in the country. The two firms will provide CDCUs that are ready to originate mortgages with many of the tools that they can use to help make their entry into the mortgage market easier and build their capacity, according to Cliff Rosenthal, executive director of the Federation. “We’re honored to be selected as one of the Federation’s mortgage partners,” said George Shipman, Vice President of CU Partners, “We can offer home buyer loan options and flexibility that few lenders can match,” he said. Shipman explained that CU Partners has experience working with both conforming and nonconforming mortgages and asserted that he and CU Partners bring a passion to this topic that few people or firms can match. “We agreed to help the Federation because we strongly believe in credit unions and that credit unions need to get more involved in real estate lending and in offering mortgages,” Shipman said. “If credit unions want to remain competitive into the future, they have to offer more mortgages, it’s that simple.” No one from PHH Mortgage Services was available to comment on the new mortgage center, but Richard Trosko, vice president with the firm noted that the firm “is anxious to assist CDCUs with their tremendous upside benefits from PHH’s state of the art mortgage technology and unprecedented service guarantees.” Although many might imagine that low incomes among CDCU members might be the biggest obstacle blocking them from obtaining a mortgage, Shipman made the case the CDCUs, like all credit unions, struggle to get the message on their mortgage offerings and opportunities out among their members. “In study after study,” Shipman said, “we have found that the biggest obstacle to credit unions offering more mortgages is awareness among members. We look forward to helping CDCUs streamline their mortgage operations as well get the word out about the opportunity to own a home,” Shipman said. [email protected]