Question: Been down to your friendly neighborhood credit union lately?
You could find that elusive home loan you been unable to get anywhere else.
Credit unions didn’t need a bail out during the Great Depression, they didn’t need federal intervention during the Savings & Loan debacle and they don’t need government assistance now.
In fact, right now, they are rolling out the red carpet for home loan borrowers.
During the boom, credit unions avoided writing subprime home loans and other easy-money mortgages. They also shunned selling packages of mortgages to Wall Street moguls who packaged them into now low- to no-return securities.
That means credit unions are relatively untainted by the credit squeeze and they have both money to burn and a sound business foundation that allows them to keep on lending.
Answer: Yes they do. I gave up conventional banks in favor of my credit union over 25 years ago. I get most of their services free, and those I pay for (safe deposit box, notary service, money orders, etc.) are cheaper, by as much as half, than any bank.
Anyone can join, and get basic services for reasonable fees. But, in most cases, things aren’t free until you deposit a few thousand dollars in long term CDs, establish and loan history, and you are member long enough that it’s obvious you’re not just using them as a pass through for your money.
The reason credit unions are still viable in this economy is that they don’t lend money to people who can’t afford to pay it back. They thoroughly verify everything on loan applications, they secure the collateral with proper liens, and they aggressively pursue those who default. All of the employees, from entry level tellers, to the CEO are salaried. They don’t get commissions to push services or close loans.
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