PR Update: Subprime Recedes, Recession Leads as Issue for 2008

foreclosure-sign-732444.jpgThe subprime mortgage issue first appeared as a mere blip on the radar screen nearly a year ago, but has reached a crescendo lately as foreclosures rise, markets fall and uncertainty reigns in the minds of many. Taken as a PR “talking point” however, it looks to me like the subprime mortgage storyline is receding.

As you know, two credit unions in NC, State Employees’ CU and Local Government FCU, rolled out specific products in 2007 to help people in risky subprime loans. These credit unions have combined to help hundreds of families refinance out of these loans. In the process, both credit unions garnered a lot of positive earned media coverage for their efforts.

(To be clear, SECU and LGFCU obviously did not roll out these products to get earned media coverage … but in their wisdom, they saw how leveraging the PR process helped them spread the word about their products, and the mortgage products differentiated the credit unions from banks. While talking heads were offering fear, LGFCU and SECU were offering a way out for homeowners.)   

The subprime mortgage issue remains important to individual consumers and credit union members in 2008. A lot of mortgage resets loom across NC and the US in the year to come, which of course means that many people will be at risk of foreclosure. However, a few factors that were not in play in 2007 will provide clutter for credit unions that are designing mortgage products to deal specifically with subprime:

  1. Mortgage rates have plummeted in the last couple of months to their lowest point in at least a couple of years. Anyone who can refinance should be able to do so pretty easily, particularly when it comes to conforming loans.
  2. Last year’s headlines were all about subprime – which made LGFCU and SECU’s products newsworthy. This year, subprime as a storyline will have to share the stage with the threat of recession, stock market volatility and a raft of economic data. In short, subprime just ain’t sexy any more.
  3. The federal government and the Federal Reserve are getting aggressively involved in the ills of the broader economy.

This is not to say that credit unions shouldn’t be actively communicating how they can be a relevant resource for members and consumers in the months to come … especially those who need to refinance their mortgages. However when it comes to leveraging the media, the subprime mortgage issue is literally last year’s news in my opinion.

As a result, credit unions trying to spread the word about how they can help consumers will have to refocus their messages.

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