By Anatoli W. Murha
Member relationships are deeply rooted in the history of Ukrainian Selfreliance Federal Credit Union (UKRFCU). We formed in 1952 to provide financial services to Ukrainian immigrants arriving in Philadelphia after World War II, many of whom were refugees. Today, we continue to serve the fourth generation of a tight-knit community of Ukrainian immigrants and their families.
While most of our more than 11,000 members live within an hour of our main office and branches in the Philadelphia area, we’ve invested in our online presence and shared branching so that they can continue to bank with us wherever they live or work. As the financial industry has grown and diversified, we’ve also expanded the products and services we offer to meet more of our members’ banking needs.
Until we joined the Mortgage Partnership Finance (MPF) Program in 2009, our members were looking elsewhere for home loans because it simply wasn’t feasible for us to hold 30-year fixed-rate mortgages in our portfolio. The MPF Original product lets us eliminate our interest rate risk by selling mortgages into the secondary market, while giving us the option to continue servicing the loans ourselves. This is important to our members, who can rest assured that if they have questions about their mortgage, we’ll always be here to help.
By participating in the MPF Program, we’re also able to offer these loans at very reasonable rates, allowing our members to enjoy large-institution benefits while maintaining their connection with a smaller, community-focused institution like ours.
Sharing the Benefits of High-Quality Loans
We know our members, and we work diligently to ensure that they are in good financial standing and are able to afford their home. The unique risk-sharing structure of MPF Original lets our credit union benefit financially from the strength of our member relationships and the resulting high quality of our loans.
On top of the revenue we gain from selling and servicing the mortgages, we receive credit enhancement fees for assuming some of the credit risk of the loans we generate. These fees are not tied to the market, and with our near-zero delinquency rate, they’ve allowed us to draw a reliable cash stream while keeping our members’ interest rates low.
Worth the Effort
In the credit union world, we all wear multiple hats and bear numerous responsibilities. When I speak with credit unions that haven’t yet taken advantage of the MPF Program, they often tell me it just hasn’t reached the top of their list of priorities.
Even if you’re strapped for time, I encourage you to take a moment to contact an MPF Program representative and learn which MPF products might benefit your credit union and potentially allow you to expand your product offerings. That small investment of time could yield a great return.
Anatoli W. Murha is Director of Business Development with Ukrainian Selfreliance Federal Credit Union.