There are seven lessons we learned or re-learned as we have survived the worst state economy in the nation during the past five years:

1. Land is always speculative. Even well-heeled borrowers who can afford to pay will try and negotiate underwater land. Land value will drop faster and more deeply than any other asset in a depressed market.

2. Fifteen-year amortizing first mortgages withstand a depressed real estate market without much damage to the lending institution.

3. Be aggressive in funding ALL and valuing foreclosed assets early. Appraised value of REO property is a useless valuation tool for real sales prices.

4. Cost cut early and aggressively.

5. Keep staff cross-trained. During difficulty, spreading tasks around becomes much easier.

6. Communicate openly and honestly with staff. It gives them buy-in for the required shared sacrifice.

7. Credit union groupthink solutions are not always the best financial decision for a specific credit union.

Wayne Tew, president and CEO
Clark County CU
Las Vegas

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