Charter Oak Changes Gears To Mortgage Lending, Earns Recognition

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GROTON, Conn.-Charter Oak FCU here has been named Eastern Connecticut's No. 1 Mortgage Lender, based on data compiled by The Warren Group. No CU in Eastern Connecticut has ever earned top mortgage lender honors.

Up until 2009, Charter Oak was primarily involved in auto loans, but with the downturn in the auto market, COFCU shifted gears. The result: more than $132 million in originations during 2010. The $653-million CU was particularly successful with its Cost Saver Mortgage and Mortgage Accelerator programs. In 2009, CU officials believed there was an opportunity with borrowers seeking to pay down their existing debt due, rather than invest in new low-interest rate investments or the equity market.

The Accelerator program was priced to incent members to shorten their remaining maturities. Members taking part in that program accounted for more than 60% of Charter's mortgage activity in 2010. Additionally, Charter Oak's core earnings in 2010 rose by 87% over the previous year, from $3.1 million in 2009 to $5.8 million last year. That growth was aided by expansion in two counties, lifting deposits by 4.6% to $546 million. Charter Oak shared its success through its "Gold Rewards" program, depositing $100 into 2,160 qualifying member accounts.

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