In the first month of offering the assistance of CU Realty Services, a Los Angeles-based credit union has seen its purchase money housing finance program pick up.
The 42,000 member, $777 million Los Angeles Police Federal Credit Union launched a program called Home Advantage that it created in cooperation with CU Realty Services, a housing finance and real estate CUSO which specializes in helping credit unions build their purchase money loan volume.
LAPFCU reported the member reaction has been very positive, with 103 members signing up for the program, with four beginning the application and underwriting process.
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"Increasing interest rates and a decrease in refinance business have created a perfect storm for growing purchase mortgages," said Manny Padilla Jr., vice president of marketing at LAPFCU.
CU Realty focuses on helping credit unions get in with members very early their home purchase or home sale processes and works with real estate professionals to help make sure the credit union makes the purchase money loan.
"We know the entity homebuyers connect with first during their online search is the one most likely to steer them through the buying process – including financing," said Mike Corn, CU Realty's CEO. "By making an early connection, credit unions can actively help members find their homes – and finance them."
Padilla added, "Growing the mortgage business is definitely important to us, as these are the most profitable loans you can make.
"A single home loan can equal seven auto loans, and it builds longer-term member relationships. Given California's current market conditions – the short supply of homes, multiple price offers, and significant increases in prices – the time to focus on purchase mortgages is now."
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