Duke Credit Union offers stability in uncertain times
Monday, December 8, 2008
Durham, NC -- Duke research associate Karthik Vishwanath and his wife, Vrinda Kalia, did their homework before buying a new home in southwest Durham.
After calculating how much they could afford and comparing rates at several banks, they applied for, and received, a mortgage through the Duke University Federal Credit Union.
“Now we’re paying about $850 a month to own a home, which is only a little more than we paid for rent,” Vishwanath said.
Despite the national credit crisis, the Duke Credit Union has not toughened lending criteria, said Dan Berry, chief operating officer. The credit union offers competitive loan rates for qualified buyers for home equity and mortgages, automobiles and educational expenses.
Unlike lenders that offered subprime loans and are experiencing a high rate of late payments and foreclosures, Duke Credit Union’s delinquency rate in 2008 is only about 1 percent, Berry said.
“This means that one out of 100 of our loans is not being paid as agreed,” he said. “Our loan portfolio is stable because our policies have never allowed borrowers to take out loans based on unrealistic repayment plans. We’re the same reliable lender that we’ve always been.”
The credit union’s strong reputation has encouraged 425 new members to join this year, boosting ability to make loans, Berry said. “With members trusting us with additional deposits in these difficult economic times, Duke Credit Union has the resources to lend,” he said.
Nationally, about 90 million people belong to about 8,000 credit unions. Deposits are insured by the National Credit Union Administration (NCUA), a federal agency in Washington, D.C. Coverage was increased to $250,000 on individual accounts; $250,000 on Individual Retirement Accounts through Dec. 31, 2009, as part of the federal financial stabilization package.
Rodney Hood, vice chairman of NCUA, said credit unions like Duke’s, which are non-profit and tax-exempt, typically offer lower interest rates on loans and higher rates on savings than commercial lenders.
“Credit unions like Duke’s really are weathering this storm well,” said Hood, a Durham resident.
So far this year, the Duke Credit Union has approved more than 40 mortgages for homes valued at a total of more than $5 million, and the applications keep rolling in, said Scott Baker, the credit union’s mortgage lending officer.
“In the past few months, things have really been picking up,” Baker said. “This August, I had 18 applications for first mortgages, compared to six last August.”
Many loans are with the HomeExpress program that provides 100 percent financing for applicants with a credit score of 660 or higher.
Vishwanath, who received a HomeExpress loan, encourages Duke employees to check out the credit union.
“They have good rates and sat down with us to discuss our options to make sure it was a payment we could definitely afford,” he said. “That helped us feel comfortable because we didn’t want to overstretch our budget.”
