PHILADELPHIA -
Fred Rothlein, PFCU’s mortgage manager, said the ratio is about 67% purchases to 33% re-fi’s. “Looking back to the beginning of October, my guess is the increase in mortgages is due to the drop of rates,” he assessed. “We have not pushed refis in our marketing. We are telling people we were not hit by the bad loans they’ve been hearing about; we are still here and have money to loan. We have indicated they should see us if they have an ARM rate that is resetting, but it hasn’t been a major thrust.”
When members come to Philadelphia FCU for a mortgage, the credit union asks them what brought them in. Most often, Rothlein reported, members say the reason is the credit union’s branch network.
“They are just coming in and enquiring,” he said “There are fewer competitors, but that’s not necessarily why we are seeing the increase.”
Philadelphia FCU offers competitive rates, although Rothlein said it does not attempt to lead the market. He said the credit union follows Fannie Mae pricing, “but we don’t have a lot of add-on fees and our closing costs are less than people are seeing. What I’m seeing is rates have come down and people think it is time to take advantage of those lower rates and get into the home purchase market.”
Although the Philadelphia market has not done “too badly” in terms of declines in home price appreciation, Rothlein said he believes the real estate crisis is going to be around for a while. “This isn’t enough to solve that. There are many people in subprime loans and option ARMs, and that’s going to be an issue for some time to come. Credit unions have the ability to help a lot of those people, but not to the extent it will solve the crisis.”
