It was no surprise that when the housing bubble burst, Michigan was among those hit the hardest – the state has been struggling economically for years. In spite of this, or perhaps because of it, Michigan credit unions have been among the most solution-oriented institutions in the country in assisting homeowners dealing with the mortgage crisis fallout.
When the housing problems began to swell, the MCUL and credit unions were quick to offer their willingness to work with state agencies to find answers. Within the first two weeks of 2008, a Mortgage Crisis Summit held at the Michigan Credit Union Center addressed what credit unions could expect in the near future, and ideas were exchanged of how credit unions could pool their resources and best assist in addressing the increasingly worrisome problem of falling home prices and the subprime mortgage mess that credit unions had avoided. At that time, the most noteworthy and startling statistic was the 6.5 percent loss in value for the average U.S. home in 2007 – the steepest one-year decline since the Great Depression.
Open communication between mortgage CUSOs, credit unions, the Michigan State Housing Development Authority (MSHDA), the Department of Housing and Urban Development (HUD), NCUA, OFIR and the MCUL became a top priority – including a Mortgage Lending Summit in May. If credit unions were to continue to remain in a position to offer solutions, continued responsible lending and understanding of compliance issues would be necessary.
Now standing on the precipice of 2009, the foreclosure crisis shows no sign of easing up for the U.S. as a whole, though the numbers in Michigan have fared slightly better according to data in the fall from RealtyTrac and Foreclosures.com. Credit unions are well-positioned to continue helping their members and communities avoid being swept up in housing problems, but it will require a steadfast commitment to keeping these groups educated. The MCUL is looking ahead to ways to assist with this effort, including securing a grant from the National Credit Union Foundation (NCUF) toward producing a video targeted at credit union members facing foreclosure; a study commissioned by the Michigan Credit Union Foundation (MCUF) for the Filene Research Institute to study the causes and effects of the housing crisis; and continued education into the new year.
The NCUF awarded an Innovation Grant of $43,828 to the MCUL for a video on foreclosure prevention, which will be produced in partnership with CU Village. It will be shared on DVDs and online, informing homeowners about money management and financial resources.
The video will be the centerpiece of a Web page for troubled homeowners that will include information on the most current mortgage relief programs such as those offered by HUD and MSHDA. The video will also be distributed through individual credit unions and as part of a partnership with the Michigan State University Extension and the Michigan Association of United Ways.
“The video will help credit unions to be even more a part of the solution to the foreclosure crisis,” said CU Village President and COO Todd Mason. “By combining the educational power of a video and the resources available on the Web site, we are able to provide a tool to help people avoid the trap of foreclosure. The credit union network and our partners in this project will make sure that the video is seen by those who need it.”
Foreclosure Crisis Report
The MCUL has commissioned a report from the Filene Research Institute, a credit union “think and do tank,” to address the foreclosure crisis in Michigan and seek out possible solutions. The report, which will be completed in January 2009, will feature analysis of the current state of affairs, concrete policy recommendations and ideas to help credit unions and their members address the crisis.
The solutions can serve as a model for the rest of the nation’s lawmakers and credit unions. By looking at the effectiveness of individual state and federal programs, the study will provide a point of comparison for successful programs and help promote their export to other states. The results of the research will be published in a concise, 20-page whitepaper for distribution to policymakers, credit unions and state leagues. Visit www.filene.org for examples of Filene Institute research reports.
Foreclosure Education Events
Already, the MCUL has responded to credit unions’ needs for information and training to accommodate the sagging Michigan housing market and increased risks of foreclosure. The annual Lending Conference, special foreclosure workshops and summits have helped credit unions provide their members with expert counseling and foreclosure avoidance strategies and also keep members from making choices that put them in dangerous financial straights.
The Mortgage Crisis Summit in January gave credit unions statewide a chance to discuss efforts to help members deal with the difficult economy and stay in their homes. It also allowed for credit union leaders to discuss industry-wide solutions to the mortgage crisis. The Foreclosure Workshop, which took place in July, gave credit union lending professionals a chance to learn more about giving options for homeowners with troubled loans. The 2008 Lending Conference had a special session devoted to preventing and surviving foreclosure losses and the upcoming Lending Conference in February 2009 will also highlight the work of credit unions to improve the housing situation in Michigan. Credit unions can expect MCUL Education to continue addressing the housing crisis into the New Year and beyond.