Firemen's CU In Venture To Help Buy, Sell Properties
Los Angeles Firemen's Credit Union has entered into a partnership with firefighter-owned and operated Pacific Shore Mortgage & Properties to run a business venture designed to help California firefighters buy and sell homes and investment properties.
The new entity, known as Firehouse Real Estate Services, was launched Nov. 16, Los Angeles Firemen's CU's 70th anniversary.
LAFCU, headquartered here, serves all of California's full-time, professional firefighters and their immediate family members. Mike Mastro, president and CEO of the $720-million, 22,000-member credit union, said the partnership with Huntington Beach-based Pacific Shore Mortgage & Properties is an example of the value-added benefits the CU looks to provide for its members-especially in conjunction with the anniversary.
"We are pleased and proud to reach that milestone," he said. "We are very branded in serving the firefighter community. We want to help them find a home or investment property, plus give them some benefits on the loan. Of course, it adds income to the credit union."
The high price of California real estate was not a primary driver in the foundation of the new venture, said Mastro, adding, "our members make a decent living, and some have second jobs."
Jackie Benoun, LAFCU's vice president of real estate, said Firehouse Real Estate Services will offer sales commission rebates of up to 50%. The CU hosted an open house at its branch here on the date of the anniversary, and dedicated an office to the new company. She said LAFCU sent out a direct mail piece, and the service will be further promoted through statement stuffers and on the website.
"We have a very loyal membership and have a lot of these loans, but we wanted to increase that number," she said. "Any members who are aware of the service and call the credit union wanting to use it will be referred to agents at Pacific Shore. We will give them pre-approval to make things seamless for the agents."
All real estate agents at Pacific Shore also are firefighters, which Benoun said will help make LAFCU members more comfortable.
"The main purpose of Firehouse Real Estate Services is to take more control over the transaction and provide excellent member service," she said.
Wayne Womack, who is both a firefighter and paramedic for the San Bernardino Fire Department and vice president of operations for Pacific Shore, said LAFCU is the only credit union Pacific Shore currently is working with.
"This is a very prototype program, and I expect it will be controversial," he said. "The National Association of Realtors and the California Association of Realtors have lobbied against this very thing-financial institutions getting involved in real estate."
Womack said he worked on the conceptual design and helped implement the new business plan, but said his responsibilities would be handed off to Tom White, a fire captain with the City of Long Beach, Calif., as well as the new manager for the company.
According to Womack, Firehouse Real Estate Services spent two years in conceptualization and gathering legal opinions. He said Pacific Shore approached other public safety CUs prior to LAFCU, but none of those expressed interest. "I think they were very shortsighted," he declared. "We felt we had a pretty good introduction to LA Firemen's because of the firefighter angle. Plus, the fit with our vision and their vision made it a very compatible relationship."
The benefits to LAFCU are numerous, Womack continued. He said most CUs find themselves in the position of capitalizing mortgage refinances, and are not transferring to sales. Most brokers in California offer inclusive services, which he said leaves CUs looking for ways to complete the program.
Womack said Firehouse Real Estate Services offers one point of contact throughout the real estate process: from the loan to representation during the purchase to escrow. Down the road, the company might add title insurance. "These are bundled services, with a cost savings to members."
"Really, it isn't even a referral," he explained. "There will be a person in the credit union to take down the lending information. Pacific Shore helped to create the shell and is the managing partner of the corporation, but LAFCU has control. The credit union took the risk, we developed it for them, but Pacific Shore's role is very discreet. It is, for all intents, their real estate corporation."