In a historic neighborhood of New Orleans, where many childhood friends and neighbors have been replaced with new families and small community businesses, lives Cynthia. Expensive remodeled homes line the street, and construction companies have become a natural fixture of the neighborhood she has resided in for more than 30 years.
"After Katrina, a lot of folks who used to live in this area sold their houses to the highest bidder,” states Cynthia as she looks across the street to what used to be her family home. "After houses like this are remodeled, they go anywhere from $200 to $700,000”. During the time after Katrina many large financial institutions profited from the reconstruction of homes in the greater New Orleans area. High interest rates and fees made it almost impossible for many living in the neighborhood to fix the damage caused by the hurricane.
Over a period of time, Cynthia visited a number of financial institutions in the city to find a loan for the reconstruction of her home. "I wasn’t looking to purchase a home,” she stated. "I just needed help with fixing it so we could live in it”. With each visit, she was met with courtesy, but left with shattered hopes after countless denials for financing.
Finally, she turned to her credit union for help. ASI worked with Cynthia over a short period of time and helped get the construction loan she needed to remodel her house when other financial institutions turned her away.
"I thank ASI for making the process so easy. The mortgage department said they could help me, and they did. I tell everyone I know that ASI helped me when no one else would”. Cynthia owes the simplicity of the process and the fast turnaround time to her satisfaction. "I thought for sure I would be turned down again or have to wait forever to get a response on my application. From start to finish, the entire loan process took less than I expected!” With the renovations, Cynthia was able to triple the value of her home.
SLASHING HIGH INTEREST RATES FROM $482 TO $333
An ASIFCU member came into the Mid-City branch in New Orleans in hopes of refinancing her vehicle from another lender and saving money on her monthly payments. Jennifer, in our loan department, was able to take a deeper look into this member's situation. Around the time our member purchased her vehicle she lost her husband. She had unanticipated expenses relating to his death and medical expenses. We were able to lower her interest rate from 24% to 5.25% which reduced her monthly payment from $482 to $333 a month.
With the high interest rate she had, she made over $20,000 in payments to the lender, of which only about $4,000 went to pay down her balance and $16,000 went to interest.
"Having the ability to help save our members money and teach them how to be prepared for unanticipated expenses is why I love working for ASI" said Jennifer.
SAVING OUR MEMBER $110/MONTH
ASI longtime member Betty was living life on a fixed social security income. She was caught in the predatory trap of payday loans. ASII (A Shared Initiative, Inc.) to the rescue! Mr. Joseph recognized her situation and called to see what ASI could do to help. Once the initial interview took place, he realized that our member had been trapped in payday loans for well over 5 years. She was paying the minimum interest amount each month which never lowered the principal amount.
Betty soon found that living on a tight budget, with no room to wiggle, would force her into another payday loan. Upon completing a budget and credit counseling class with ASII, she was approved for a Freedom loan to pay off her three payday lender loans. This saved her $110 a month! In addition, ASI was able to space out her first payment for 30 days to allow her to save that payment.
BREAKING THE CYCLE OF PAYDAY LENDERS
ASI member Nicole, who was financially struggling following her divorce in 2013, came to ASI hoping for help. She had started using payday lenders to make ends meet, and owed five different payday lenders more than $1,900. When her direct deposit was deposited into her account, the deposit in its entirety would be withdrawn by these lenders, leaving her no cash for another two weeks. Nicole also had two small loans with ASI, and her student loans were past due.
ASI approved Nicole for a $3,500 credit-builder loan for 18 months at 15% interest. As part of the terms of the ASI loan, Nicole also agreed to attend one of ASI's financial education classes called "Path to Financial Freedom." In this class, members learn important financial lessons and tools, including the difference between needs and wants; how to make a budget; balancing a checkbook and avoiding NSF fees; paying bills and avoiding late fees; the true cost of payday lenders; and the importance of repairing your credit.
Nicole successfully completed the financial education class and is now on her own path to financial freedom. With her loan, Nicole was able to pay off her other ASI loans, as well as all of the payday lenders. She was also able to bring her student loan payment up-to date. Not only does Nicole now have extra money in her pocket each pay period, but ASI is saving her more than $430 per month in unnecessary payments and interest!
MORTGAGE MODIFICATION SAVES COUPLE $250/MONTH
In 2013, Mr. Johnson , an ASI Federal Credit Union member, went in to the ASII offices to discuss his need of foreclosure counseling. He and his spouse were delinquent on their mortgage payments, which were $887.92 per month with a fixed interest rate of 6.7%. The reason for default was due to an increase in expenses as a result of a medical illness. Although the Johnson family had sufficient income, the increase in hospital bills created a financial strain for them. In addition, they had also fallen victim to a mortgage relief scam, in which they lost $1,000.
In an effort to try to recoup Mr. and Mrs. Johnson's funds, ASII filed a mortgage relief scam complaint on their behalf. Their loss mitigation packet was submitted on February 8, 2013, and by April 1, 2013, they received a loan modification trial plan agreement. This obligated them to pay $630 as a trial plan payment from May to July 2013. Their successful completion of the trial plan resulted in a permanently modified mortgage. Their new mortgage payment is $630.31 per month with a fixed interest rate of 4%. This saves them more than $250 per month!
AUTO PROMOTION HELPS PAY DOWN LOAN
ASI Member Seneca and her husband, both of whom work at Huntington Ingalls and drive back and forth every day, were looking for a new vehicle. They had plenty of miles on their car and needed something newer and reliable. After talking about it for months, they finally decided it was time to purchase.
Seneca filled out a loan application to get a preapproval so she would know what price range to look in. She then went out and started shopping, eventually narrowing her search to a Hyundai Santa Fe SUV. Seneca came into the branch, signed for her loan and was ready to go and pick up her new vehicle.
A couple days later, Seneca came back into the branch and told all of the staff how much she loved her new SUV. Because she had gotten a loan during ASI's "Squeal of a Deal" promotion, Seneca received 1% cash back on her loan! Rather than take the cash, Seneca decided to apply the money towards another loan she had with ASI. Now that's being financially savvy!