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Filene CUs can reimage the home ownership dream
MADISON, Wis. (12/1/09)--Credit unions are challenged to consider the past and current trends in home ownership, to think beyond mere mortgages, and consider how to redefine the American dream in the Filene Research Institute’s most recent innovation report. “Reimagining the Dream: The Future of Home Ownership,” by Denise R. Gabel, Filene chief innovation officer, challenges readers to identify potential treatments by developing and implementing game-changing ideas that could reshape the residential lending marketplace, and simultaneously benefit borrowers and lenders. Financial innovation has too often benefited sophisticated market players, Gabel said. The ideas included in the report seek consumer-friendly innovations. Gabel asks credit unions to consider some thought-provoking questions, including:
* How can home loans be made more flexible for the borrower over the full term of the loan to accommodate periodic changes in income and employment? * What ideas can be developed that blend renting and owning? Can the rent-to-own model be made relevant again? * Since the down payment is one of the biggest obstacles to home ownership, are there ways to lower or remove this barrier? * Because a borrower’s direct relationship with the originating lender is often terminated when a home loan is sold to another lender or to a servicing company, how can this relationship be preserved?
“The opportunity is ripe for credit unions to find creative solutions that will help existing members, attract new members, and contribute to the financial stability of communities,” Gabel said. “Too often, however, product development is driven by balance sheet and income statement considerations first, and consumers’ needs second. Credit unions should look to members’ needs first.” Then, credit unions should drive product development accordingly by questioning how they can help members achieve their vision of “home,” whatever that may be, even during extraordinary times, she added. For more information, use the link.
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