HOUSTON -
“We don’t do a lot of real estate loans, other than some first mortgages for our employees, but we had a lengthy discussion today about refinancing all types of loan products with the drastic rate reductions,” said Dana Rawlings, SVP/chief operating officer. “There is no question with rates down, people are looking to refinance. Several of our employees have enquired about refinancing something they currently are paying on.”
Rawlings said Smart Financial has been “very blessed” in its lending portfolio, which he described as “very solid” over the past five years. Smart Financial’s delinquencies are “very low,” he continued, “despite most of our loans being consumer loans. We ended December with a 0.39% delinquency rate. Net charge-offs were 0.65% for the year.”
Smart Financial has not done any recent lending-related advertising, but in March it will begin marketing more to its members. Rawlings said the process starts with new member applications. When the CU pulls credit bureau information, the rep shows the new member exactly how much money can be saved if they refinance through Smart Financial. Second, when taking loan applications, management has instructed the loan officers to look for cross-sell opportunities.
“We expect to have a direct mailer and in-branch materials by March letting members know we are interested in refinancing any type of secured loans or signature notes,” said Rawlings.
There is “no question” there are fewer lending competitors in the Houston market, he reported. “Thousands of small lending operations, as well as many larger ones, are no longer in business due to the mortgage crisis. The ones who are still in business have such strict standards, it gives us an opportunity.”
Rawlings said Smart Financial’s CEO recently returned from a conference where he heard an economist say Houston is the one city in the country that has not been affected by the severe depreciation in home values. That, along with a strong local economy, are two reasons the CU is looking forward to establishing its real estate lending department.
“There is a definite opportunity to get in, as long as we do conforming loans and retain the servicing. We will not do anything wacky, because greed is what got the industry into trouble. Too many people were overly creative and put people into loans they did not qualify for.”
