Lending

‘Thanks for Treating Me as a Friend’

CU blends lending acumen with a genuine concern for members.

January 16, 2013
KEYWORDS credit , loan , mortgage
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Northeast Community Credit Union in Elizabethton, Tenn., serves the surrounding rural communities in a caring, yet innovative way that harkens back to the original mission of financial cooperatives.

The $80 million asset credit union’s mortgage special is evidence of this approach. Northeast Community realized it could charge a flat $500 fee and still achieve a net gain over the life of the loan.

The credit union asked local attorneys, real estate agents, and appraisers to reduce their costs during the special promotion, and these providers agreed to do so.

This mortgage special spurred growth from an average of eight mortgages a month to 26 mortgages for $2.7 million during the first month of the special. The credit union closed about $8 million in mortgages during the three-month promotion.

This shows that innovation need not be the province of large organizations with like budgets, says Kathy Campbell, Northeast Community’s president/CEO.

“Our vendors frequently refer to us as early adopters, as we tend to embrace new technology and product lines quickly,” she says. “We use database mining, for example, to target members with existing home loans. Loan officers also contact members for whom they had recently done loans of any type.”

This personal contact helps cement relationships with members and provides a foundation for member referrals. It also offers an opening to obtain more loans from members.

“Every time the loan officers have opportunities for face-to-face contact with members, they take time to analyze every debt and every financial relationship,” Campbell explains. “Members are shown how moving an outside loan to the credit union saves them considerable money.”

Flexibility is another key component to Northeast Community’s success. Members experiencing financial difficulties can obtain modification agreements for first mortgages. They can change the frequency of mortgage payments to go to weekly, bi-weekly, or monthly.

The credit union’s numbers speak for themselves: Loan growth was 13% in 2010 and close to 12% in 2011, and net worth grew almost 12% during both years.

But beyond the numbers is how the credit union puts its “people helping people” philosophy into daily practice. Campbell recalls a member who got a divorce and faced the prospect of losing her home.

Her mortgage had been sold to a “company that was soon to give me more grief than I had ever known,” the member says. “They sent a letter stating I was behind in payments and requested as much as $4,000 to be sent or I’d face foreclosure within a few weeks.”

After a year of harassing letters, working two jobs, and sending thousands of dollars to the mortgage company, the member was “beat and ready to give up.” She made her way to Northeast Community and found loan officer Stephanie Grindstaff.

Grindstaff helped her immediately, refinancing her mortgage and promising to never sell her mortgage again.

In a letter to the credit union, the member wrote, “Thank you Stephanie and the staff of Northeast for treating me with such kindness and respect. Thank you for making it so easy and caring about me, and treating me as a friend. I’m forever grateful.”

Northeast Community Credit Union won an Excellence in Lending Award from CUNA Mutual Group and the CUNA Lending Council for outstanding credit union mortgage lending (less than $250 million in assets).

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