Countrywide calling
Posted by Trey Reeme on October 23rd, 2007
American Banker’s Morning Scan reports today that Countrywide Financial is about to run up their phone bill. They’re about to start calling $16 billion worth of folks with ARMs that’ll reset before the end of next year. They want the refinance. Shouldn’t we?
Why shouldn’t CUs get aggressive in refinancing these loans? Hey, you’ve got access to the member’s credit reports. You know what an ARM looks like… you know that seeing Wells Fargo Financial or Citi Financial or HSBC on the credit report with a mortgage means you could help many of these folks dramatically – many are resetting ARMs.
We won’t be able to save every ARM. Yup, a lot of our members took loans that in hindsight weren’t the best move. Let’s help the ones we can.
BTW, kudos to American Banker for redesigning their site and including a Banker’s Blog Watch. Double kudos for putting us on there.
Trey -
Thanks for posting this information. A couple of our credit unions here in NC – Local Government and State Employees’ – have been consistent in their messaging about this issue. Both have developed mortgage products aimed at helping people trapped in some of these bad loan products.
A few other CUs here, while not developing product solutions, have made members aware of their existing mortgage products.
I’ve heard some SECU members have been moved to tears in the branches when they were able to sign the papers that got them out from under the crushing burden of a mortgage that had blown up on them.
This whole subprime mess is a clear and present opportunity for credit unions to differentiate themselves – we make loans that people can afford … loans that are structured to help members build equity … not extract it from them.
It’s a shame that more credit unions don’t understand how powerful this issue is.
Thanks for raising it in this forum.
We thought this a few weeks ago and our outbound sales team is already on it. Though we won’t get a hold of as many as Countrywide will, we will get many of them.
No RSS at ABA blog watch?
I noticed the no RSS as well! But at least it is a start.
It is refreshing to see some in the banking industry find opportunities to actually do things with credit unions. I saw this morning a CUNA article about the Oregon Bankers and the credit union association joining forces on a ID theft task thing. Maybe during the upcoming changing of the guard in a few years as everyone retires, banks and CU’s could start being more collaborative together!
I just got a mortgage through a broker (best rate, lowest cost, there wasn’t a CU nearby). Then a funny thing happened. My bank, which I have been with for three years and which has consistently sent me milquetoast credit card offers, mailed its first ever offer to apply for a mortgage.
The dirty little secret at the credit bureaus is that a totally uninvolved third party can pay to know when you’re shopping and then solicit your business. Doesn’t matter if they already know you or not.
It’s expensive, but I have heard innumerable credit unions gripe that members don’t know about CU mortgages. For that same fee my bank paid, they could find out when their members are looking for a loan.
Banks use the service, mortgage brokers do too, and, until the practice becomes illegal, credit unions should get on board.
I posted this morning but think the big, bad monster of the Internets must have been in an eating mood this morning. :)
A couple of our credit unions here in NC have rolled out specific products aimed at members trapped in subprime loans. A few others have not gone that far, but have made their mortgage offerings a little more prominent in their messaging.
I talked with a person at one of the CUs that’s offering tailored solutions – she said that some members have literally cried when signing the papers that refinance them out of bad mortgages.
It’s such a clear point of differentiation and easily the most powerful consumer/member issue I’ve seen in my 4 years in CUs.
Hopefully more credit unions will jump in and speak directly to people trapped in these awful situations.
Thanks for raising the issue in this forum, Trey.
I have been expecting this to happen. No one wants their customers to go broke.
I refi’d through a broker friend. In my lifetime I have financed through Countrywide, Ditech, half a dozen other lenders and a bank. Why? Easy – service. Ditech was SUPER fast and seemed to always be on the ball. Same with countrywide. My frined the broker cut me a break on the fees but hustled and took care of everything for me.
I went into Golden One to finance my current home. It was like pulling teeth! The lending rep didn’t want to help me. She actually spent half an hour telling me why I wouldn’t get funded (jumbo loan or some other issue even though I was well within their boundaries). I ended up walking out and getting a loan somewhere else for the same rate with no headaches.
One of our Project Managers recently refi’d with Paramount. She has been having such a bad time with her credit union that she didnt want to give them her business. Plus Paramount acted like they WANTED her business. They worked with her and held her hand and gave her a cool rate.
Yeah, a lot of people don’t know that they can get a home loan with their credit union. But what happens to those who do know? Do you follow up? Do you treat them like valued customers (I just did a whole post on this topic so its still fresh in my mind). I am sick of walking into credit unions and having to listen to two teller talk about their weekend and feel like I am interrupting THEM.
Wow, that turned into a rant :)
I’d love to see our credit unions become comfortable with the idea of being “aggressive” enough to pursue those refi’s too. I think we need to continue to persuade the CU’s that being aggressive in sales doesn’t have to mean being “overly salesy” or too bank-like. It’s more about knowing that you don’t get anything you don’t ask for, and that they need to be assertive about getting that business.
I really believe that assertive sales, when done correctly and for the right reasons, actually ARE in the best interest of the member. In other words, by not pursuing those sales opportunities, a credit union may actually be letting the member down. Unfortunately it’s very easy to hide behind the “we’re a credit union, we’re not salesy” idea as an excuse for not learning to sell better.
Jeff Stephens
@Jeff Stephens – I could not agree more! One interesting aspect of this in NC … and I wonder how this is playing elsewhere … the service-culture credit unions seem to be taking more of a lead on this issue.
In scanning the web sites of the more sales-oriented CUs, they seem to be thus far taking a pass on this.
@JeffH: The first comment didn’t make it through spam for some reason. I posted it anyway after you made the second one because it rocked, too.
Jeff Stephens – I totally agree! I’ve found after working with several CUs that have really good intentions of becoming more sales-oriented, they are missing the mark during the hiring process. If turn-over rates are so high (some employees being turned off by this sales culture, therefore quitting), why doesn’t the CU take the open position as an easy opportunity to hire SALES-type people??
It baffles me that a CU wants this sales-oriented culture, yet they keep hiring non-sales people to fill their positions. I do completely understand and support the importance of hiring people with financial or mortgage industry backgrounds. But if training is made a top priority, and a CU finds eager, sales-driven individuals, it seems they would flourish in these positions – therefore boosting “sales” for the CU.
Maybe it’s easier said than done?