WASHINGTON (3/19/09)--The National Credit Union Foundation (NCUF), in partnership with the National Federation of Community Development Credit Unions, has posted a report for credit unions to address one of their most pressing issues: Helping Members Avoid or Survive Foreclosure
. The report is free on the REAL Solutions Impact Center. Use the resource link. “Foreclosures are having a devastating impact on communities,” Mark Lynch, REAL Solutions field coach and U.S. Department of Housing and Urban Development (HUD) technical assistance consultant, told 30 state credit union league liaisons on the latest REAL Solutions conference call. To gauge the magnitude of the problem: One million families--one out of every 200 homeowners--will enter foreclosure this year, according to the Mortgage Bankers Association. Lynch stressed the importance of credit unions developing a proactive communications strategy. “Getting the correct information and education to members and potential members at the right time is vital,” he emphasized. “The key message to credit unions is to be proactive. Don't wait for members to come to you for assistance and advice; then it may be too late. If a member has a delinquent mortgage with your credit union, certified housing counselors should work to determine the best way for the member to stay in the home. Most often, this is the best option for both the member and the credit union.” Some credit unions will refinance mortgage loans with up to 80-year terms if it will help members lower their monthly payments enough to keep their homes. But rather than expecting members to pay out those longer terms, credit unions plan to reduce the terms once members can afford their regular payments again. Bucky Sebastian, CEO of GTE FCU, Tampa, Fla., explained how this works in a video. (Use the second resource link.) “Every credit union can help its members with basic, accurate information and appropriate referrals, even if the credit union is not a mortgage lender,” said Terry Ratigan, senior consultant and coordinator of the federation’s national housing counseling program. “Many members in distress will turn to their credit unions as trusted advisors, so every credit union must be prepared to connect its members to the appropriate resources.” Despite credit unions’ desire to help their members, the federation warned that credit unions should not try to serve as counselors unless they are trained and certified to do so. “Because of the complex legal issues that arise with potential defaults, and because policies and workout options are changing almost daily, credit unions should not give individual advice,” cautioned Lisa Williams, director of the federation’s CDCU Mortgage Center LLC. “Doing so could put the credit union itself at risk.” Williams recommended that credit unions identify housing counseling agencies in their communities that have been approved by HUD, and refer members to those organizations. Other resources for credit unions are being developed by the federation, whose website includes a new CU Homeownership Counseling clearinghouse to help credit unions find local, certified housing counselors. (See resource link.) The site includes a list of certified credit union
housing counseling agencies, links to the national HOPE Now hotline, scripts to help explain the latest federal loan modification programs, and more. As a HUD-approved National Housing Counseling Intermediary, the federation can assist credit unions and affiliated non-profits interested in becoming approved counseling agencies. Once approved, credit unions can apply for federal grants to support the cost of counseling activities. For more information, check the federation’s website or contact Ratigan at email@example.com
or 800-437-8711, ext. 251.