TRANSLATOR: "We have members who are brand new to the United States ... and just need to understand banking in general," says Chip Allen of United Nations Federal Credit Union. Image: Dan Nelken.
TRANSLATOR: "We have members who are brand new to the United States ... and just need to understand banking in general," says Chip Allen of United Nations Federal Credit Union. Image: Dan Nelken.

All credit unions have unique membership qualities, but few have a clientele as diverse as the one serving employees of the United Nations and their families.

Chip Allen, mortgage sales manager at the United Nations Federal Credit Union, has more than 17 years of experience producing home loans for credit unions after cutting his teeth at his family's savings and loan association and mortgage brokerage.

UNFCU serves a body of international staff and their families, which creates educational and counseling challenges that most lenders don't face, especially for transactions as complicated as home loans, Allen says. In many cases, people come in not knowing how financial products like credit and debit cards and checking accounts work in the U.S. To top it off, English is often not their first language.

"We have members who are brand new to the United States. You've got people who are new here and just need to understand banking in general," Allen says. "There are real learning curves for our members who come in and don't know any of that."

Allen enjoys the work, he says, because credit unions foster a special relationship between the lender and borrower, one that emphasizes a high level of trust, since the borrowers own the institution.

"That person is no longer a customer," he says. "They are a member, and there is a very different relationship between a credit union and its members than between a bank and its customers."

Borrowers anticipate that a credit union will be looking out for their interests as a result of that joint relationship, rather than just trying to win the customer's business for its own profitability.

The credit union serves more than 100,000 members in 200 countries and territories, 65% of which are based outside the U.S. Because a big share of the UN's workforce is based in New York City, members are entering a complex real estate environment that includes condominiums and co-operative apartments in the five boroughs, as well as traditional houses and town homes in the surrounding suburbs.

"They need to have a real reliance on their credit union, and particularly on their mortgage representative, who is really tasked with leading that member 100% of the way through the process," Allen says. "It's not a relationship where you sell a couple of rates here and there and talk about a loan program and take an application and never speak with them again."

At UNFCU, the whole mortgage team, including processors and closers, often interact with the home loan applicant. One loan closer recently got a phone call from a customer who closed on a mortgage loan a couple of years ago and had a question about insurance.

"That probably doesn't happen too often at Wells Fargo," Allen says.

Allen, who has a bachelor's degree in political science from Davidson College, says he learned the mortgage business "at my father's knee." His father ran a statewide savings and loan in his native North Carolina. When the S&L crisis decimated that industry, his father opened a mortgage brokerage, where Allen worked as well.

However, about 17 years ago, as the brokerage industry was also facing challenges, Allen moved to New York and transitioned to the credit union industry, working for a credit union that served employees of the ABC television network before joining UNFCU as a mortgage representative in 2002. He learned about the UNFCU position from a neighbor.

Earlier this year, Allen assumed a leadership role as manager of mortgage sales at UNFCU,  collaborating with about 25 employees who with his team, work on the origination side of the mortgage business.

While UNFCU has traditionally served a closed membership of UN staffers, that is changing with the credit union's new affiliation with the United Nations Association of the United States of America. UNA-USA, as it's known, is an entity that any U.S. citizen can join to support the UN's mission. Now, any member of UNA-USA can also join UNFCU, which Allen believes creates a tremendous opportunity to grow the credit union's mortgage business.

"It's a game-changer for us," he says. "We will always have a strong focus on our traditional UN members, but now we can go out as mortgage sales people and generate business through all the traditional channels."

Those channels include real estate brokers, neighbors, friends and other groups.

UNFCU traditionally holds its mortgages in portfolio—home loans account for $1.12 billion of the credit union's $4 billion in assets—which gives it the flexibility to make loans that traditional lenders can't or won't make. Because of the very nature of the UNFCU's membership—many members who are not U.S. citizens—members cannot always qualify for a traditional, conforming home loan.

"We do still have the ability to lend on a non-QM file. We'd like for it to be qualified, but if other compensating factors are there and we can build a case for why we want to make this loan, we can do that," Allen says.

However, under the new regulatory environment, more documentation is required to make home loans today, especially those that are not qualified mortgages. That means Allen and his team must set the right expectations with members upfront, so they understand the volume of documentation they must provide.

Allen, a frequent speaker at UNFCU-related events, says he's seen a substantial increase in participation in webinars and social media outreach to potential home loan customers. But he also sees challenges in keeping the large share of mortgage business that UNFCU has traditionally held among its membership. Today, consumers are better informed about mortgage options than in the past, and are likely to shop around for the best deal rather than automatically going to their credit union.

"It's not a definite 'gimme,' so we need to be marketing ourselves and be sure that we've got the most attractive programs, because members—just like all potential home buyers—have become more savvy as the industry has changed," he says.

The credit union's mortgage underwriting guidelines, like those across the industry, have begun to loosen somewhat. But, Allen adds, the industry is not going back to the loose standards that preceded the housing crisis.

"For a well-qualified applicant, it has become easier to get a mortgage loan today than it was three years ago," he says.

Displayed at Allen's office at Two UN Plaza, just down the street from the United Nation's General Assembly building, is the UNFCU's President's Award, an annual honor that's given to one employee each year to recognize exceptional service. Employees nominate peers for the award and vote on the winner.

Since assuming the sales manager position early this year, Allen has been building a team to take advantage of growth opportunities. He expects his outreach efforts to increase with the potential influx of new members from the UNA-USA relationship.

"Wherever I can do that outreach, internally or externally, that is going to be my goal," he says. "My effort is to promote the mortgage center and develop new business and more business any way I can."

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