PEORIA, Ill. -
“There is a large increase in activity. And it is not just re-fis, purchase activity is up in Central Illinois,” confirmed Keith Reynolds, VP-lending.
According to Reynolds, CEFCU’s mortgage refi volume is running 208% ahead of 2007 levels, and purchase volume is 8% ahead of last year’s levels.
“The increase in purchase volume is significant for us, because with a flat market, that represents increased market share. 2007 was a very strong year for CEFCU as we closed about $270 million in mortgages, so volume is expanding from a solid starting point.”
As is the case in many housing markets not named California, Nevada or Florida, Reynolds said Central Illinois did not see a lot of the “wild and crazy loans,” in particular adjustable rate mortgages. He said the fourth-quarter numbers showed sales were down 4% compared to the year before, and prices were up about 4%, “so the area did not see the spike in prices, nor are we seeing the valley. A median-priced home in central Illinois is $140,000 to $150,000.”
Countrywide was a significant player in CEFCU’s market, but Reynolds said the troubled mortgage giant has largely disappeared from the area. “They were very big in home equity lending, but we don’t view them at nearly the same level. A lot of other subprime lenders have essentially disappeared.”
One promotion CEFCU has used to get first-time homebuyers back in the market is an offer to pick up $600 of the closing costs, which in Central Illinois generally pays for the appraisal plus the title fee. Reynolds said the credit union began this promotion in the fourth quarter and carried it into this quarter.
“We’ve promoted our rates in conjunction with the first-time homebuyer campaign, but have not necessarily promoted our rates in the media,” he explained. “We post our rates in our offices and on our website. We’re in a tightly defined market–the bulk of our members find it convenient to get to an office as they are within 10 or 15 minutes. We do a little more media than credit unions in larger markets, because central Illinois is less expensive.”
In addition to media buys, Reynolds said CEFCU’s quarterly newsletter to members is the method most of its members use for updates and news.
According to Reynolds, CEFCU traditionally does $18-million to $20-million in mortgage loans in January, “but we are in shape to do about 50% above that. We are getting a lot more referrals from Realtors about the first-time homebuyers promotion. We went to the Realtors in the area to let them know we would be doing this.”
