BURBANK, Calif.-An aggressive stance to both new loans and loss mitigation has helped Partners FCU here continue to boost lending.
According to Bill Throckmorton, manager of consumer lending, and Jeff Hays, senior manager of collections, there is no loan product Partners FCU is not offering. "We have been very proactive and we have made our membership aware of what we offer through our website," said Throckmorton. "We are working with members by helping them reduce their revolving payments, bringing loans over, doing second mortgages, HELOC refinances, consolidations of Visa cards, car loans and personal loans, and extending terms to reduce payments. We look at the household from the impact it is taking from the economy. We look for things that substantially impact the member's ability to pay, such as has the member's hours been cut?"
Added Hays: "We are supporting our members during this tough marketplace. We want to benefit both our members and the institution. Historically, loss-mitigation programs hope to gain 50% of the value. We have had about a 95% cure rate with our loss-mitigation efforts since the middle of 2008. It is a really positive win for member satisfaction and it has aided the organization by avoiding potential losses."
'Economic Recovery Resource Center' Established
The CU set up a special page on its website it dubbed the "Economic Recovery Resource Center" at www.partnersfcu.org/economy. In addition to informing members who have suffered an impact to their income of the opportunity to speak with Partners' loss-mitigation specialists, the page has links to the federal government's Homeowner Affordability and Stability Plan, an offer for a free consultation with a Partners investment services professional, plus links to resources as varied as Zillow, a home valuation site, to HUD, Fannie Mae and Freddie Mac.
Partners, which serves Disney employees in California and Florida, has done so well in lending, Throckmorton said it has exceeded its loan goals.
"We went into 2009 with some catch-up work to do and not only did we catch up, we exceeded our budget goal," he said. "A lot of credit unions are talking about loan volume being down, but our leadership put out a call to be creative, and we did it."
Throckmorton said from an underwriting perspective, Partners has not drawn any "hard lines in the sand." While some financial institutions have said they will not go over 80% or 90% loan to value for a property, "We have said we are not going to say 'no, period.' We welcome all applications, and we have been able to extend credit despite the value of properties."
Similarly, Partners does not do automated denials, he continued. "We look at all applications because we do not want to turn away members who are coming to us for help. If one underwriter turns down a loan, we have a second review to make sure. We want to make money, we want to put the loans on the books."
One loan program that has been particularly successful is auto loan refinancing-which targeted both existing loans with Partners and auto loans with other lenders. In the past year, 791 members have done auto refis with Partners, saving as much as $100 per month. Partners said its "Lower Payment Promise" campaign has saved its members an estimated $1.4 million in auto payments.
The "promise" portion of the name refers to a vow that if Partners could not lower the member's payment, the person would receive $50 cash.
"This campaign was targeted at members who did not have car loans with us," explained Hays. "We have had competitive pricing historically from a rate perspective, but the members who use us do so with a direct deposit checking account because it is convenient for work. But they are not using us as a primary financial institution. We want to compete for their business elsewhere. Over the last 12 to 18 months, opportunities have risen. As new car sales went down last year and this year, it gave us an opportunity to concentrate on a new market."
Willingness to Work With Members Is Key to Success
According to Throckmorton, the success of both the auto refi campaign and lending overall can be attributed to the CU's willingness to work with its members.
"They might be unhappy with their financial institution or they might be struggling to make their obligations due to the amount of their payment. We are proactive in working with them to find a solution, and we have options in lowering their monthly obligations."
In addition to the $50 incentive, Partners always have a pre-approval auto loan campaign running, Throckmorton continued. "The pre-approval campaign addressed new and used purchases and refinancing. The pre-approval and the $50 offer all contributed to the success."
