Products and Services:
Yankee Gas First on
National Financial Loan Network
usually comes from banks, savings and loans,
credit-card companies and other traditional
financial institutions that make money off of
money. Now, in a new trend, utilities find
themselves in the loan business.
to join this trend is a New England utility,
Yankee Energy System Inc., of Meriden, Conn.,
which found a way to expand its financing
subsidiary, Yankee Financial Services, using
customers from its main business, Yankee Gas
Services, as a foundation.
In June, Yankee Financial Services signed
on as the first utility for the National Loan Center, a new project by
Fannie Mae and Viewtech Financial Services (Viewtech),
to provide a centralized place for the
processing of low-interest home loans for
energy-saving appliances and other
improvements for single-family residential
offers below-market, tiered interest rates,
quick loan approvals and streamlined
underwriting guidelines to Yankee Financial
Services, launching many contractors to spread
the message to interested customers.
program, homeowners can borrow up to $15,000
for up to 10 years to install things like
high-efficiency heating and cooling equipment.
center, Viewtech of Anaheim, Calif.,
serves as the facilitator of the program:
receiving applications from approved
contractors, underwriting and originating the
loan to the program guidelines, and even
issuing the loan check and tracking monthly
Fannie Mae, a congressionally chartered
shareholder-owned company and the nation's
largest source of home mortgage funds,
purchases the loan obligations.
Fannie Mae launched Showing America a New Way
Home, a pledge to provide $1 trillion in
targeted housing financing by the end of the
decade. As part of this initiative, Fannie Mae
is working with utilities to help customers
through a low-cost source of funds, to finance
plays a key role in promoting the product and
it also weighed heavily on Yankee's decision
to pioneer as the first utility to sign with
the national center.
all, Ide says Yankee markets the program using
its established name and reputation as
Connecticut's largest utility. He says an
overwhelming share of customer base is coming
from the regular gas utility base.
selling point for Yankee, he adds, was Viewtech's experience. "You look at somebody
who is doing what you want ," he says. "It has
a proven track record."
1995, Viewtech operated a similar loan
program for Pacific Gas & Electric Company of
San Francisco. Through that program, more than
12,000 loans totaling an excess of $80 million
were approved in two years.
the negotiations as "quite a balancing act,"
Ide says that it was a three-way financial
agreement between Yankee, Viewtech and
Fannie Mae that made the project finally come
enrollment was in May with a very concerted
effort by the Yankee Gas Services marketing
department, which company spokesperson Geralyn
Johnson says was integral. They conducted a
series of breakfasts for contractors in a
"face-to-face" rollout, where they distributed
the material needed, including loan documents,
Of the 75
interested contractors who attended the
breakfasts, 35 became authorized to handle the
program, Ide believes the contracting force
will grow as the program gains momentum.
biggest strength of this program is that we
can give all of the documents to the
contractors," Ide explains. "The contractor
goes to the customer's house and, for the
first time, he has all of the [forms]."
that fact saves valuable time and proves less
of a hassle for contractors, who set the loan
process into motion by simply faxing it over
to the center for financing approval.
contractors fill out the loan document monthly
agreement and a financing agreement, which
takes about five to ten minutes on an average,
and the loan center goes through the retail
there's a problem with the credit, then
everything's set; it streamlines the whole
process," Ide adds. There is a two-hour window
to check the credit, but after that the deal
basically take care of it soup to nuts,"
Johnson says, noting that Viewtech
handles the payment books, and the day-to-day
activities of the program. "Our major
responsibility is to manage the contractor
network and to do marketing," Ide says. Yankee
has two primary marketing directions: