APPLE VALLEY, Calif.-With many financial institutions in trouble, bad news travels fast-and sometimes incorrectly, in the case of High Desert FCU, based here.
Ralph Ramirez, High Desert FCU's vice president of marketing and communications, told Credit Union Journal reports the newspaper had received stating the $154 million, 13,500-member credit union was on the brink of being placed into conservatorship, and that NCUA was seeking a merger partner for it, were untrue.
"It is concerning to me that an irresponsible rumor like that is circulating about our credit union," Ramirez declared. "The credit union is still under the direction of senior management and the board of directors. We still are working on loans on a case-by-case scenario with our membership."
As previously reported by CU Journal on Aug. 18, High Desert FCU has had problems with delinquent loans in a distressed housing market. In August, Ramirez said GAAP rules and late construction starts had led to a "misleading" delinquency figure of 20.45% as of June 30. Ramirez said at the time several home construction loans had exceeded their maturity dates and were required to be reported as delinquent, even though they were current and had performed from the start.
If High Desert had not been required by GAAP to include $11 million in loans that technically were late, despite being current, its delinquency ratio would have been 9.83%, Ramirez said.
As of June 30, High Desert recorded total foreclosed and repossessed assets of $3.3 million. As of July 31, that figure dropped to $2.4 million. As of Sept. 30, it moved back up to $3.4 million, meaning more foreclosures had hit the CU's books. "Part of the process is identifying solutions for our members," Ramirez said. "Unfortunately, sometimes members cannot afford their loans and must go toward foreclosure, but we attempted everything possible to keep the members in their homes."
