With mortgage rates at historic lows and the ramp up of HARP 2.0, many credit unions may be awash with mortgage loan volume. And while the refinance boom seems to have lasted years, it will not last forever. Credit unions should ask themselves if they are going to be ready with a purchase money mortgage strategy in the event that the majority of their mortgage volume disappears.
Industry leaders are probably already aware that mortgage rates are at historic lows and that much of the focus has shifted to refinancing options. Yet purchase marketing offers a greater potential for generating new home loans and the ability to offer refinancing options for loans originated by other lenders. Such activity will be crucial for sustained growth as these low rates bottom out.
With housing prices still depressed, now is a great time for members to buy a home. But as the drop in mortgage rates inevitably slows down, now is also the time for your credit union to create a purchase money mortgage strategy. A purchase money strategy has several components. It encompasses having a strong originator function, realtor outreach, great technology, solid processing and underwriting, good pricing, and a strong product menu.
While all of these features are important, a strong product menu should also allow credit unions to better meet the needs of members. Today, consumers are sometimes held back from buying a home because they lack enough money for a down payment or are feeling the pressure of tighter lending standards.
Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and US Department of Agriculture (USDA) loans can give credit unions options to address these issues and better service their members. These government loan options grant credit unions the opportunity to generate more growth opportunities and support a member-service focus. They also have low or no down payment requirements, provide flexibility in approval for members with challenged credit, and offer an alternative to private mortgage insurance.
If your credit union doesn’t currently have the option of offering government loans, but wants to add them to the product menu, there are several reasons why myCUmortgage may be the best solution:
Efficiency – The management of loan processing, underwriting and servicing can be eliminated, so credit unions can focus on members.
Affordability - Not only can outsourcing save a credit union’s operating expense, but FHA, VA, and USDA loans can be more affordable options for members.
Credit Union Expertise – As a CUSO, myCUmortgage shares the credit union philosophy and understands that world and the value of membership.
Full Service - myCUmortgage offers full servicing for credit unions through a subservicing relationship with Cenlar.
Best Economics – The combined volume of a CUSO like myCUmortgage provides your members lower closing costs and stronger revenue opportunities.
To contact myCUmortgage for a FREE Mortgage Department Analysis visit www.myCUmortgage.com/Callahan or call (877) 630-3399.
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