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Home financing is a lender’s most profitable activity and how it’s managed has serious implications (positive or negative) for the bottom line.
“Mortgage loans are a commodity; differentiation through a better process and better service yields a competitive advantage, which is important for today’s relationship-based lending activities,” explains Prime Alliance in their Mortgage Lending Performance Benchmarking Briefing Paper. Accurately measuring the amount of work done and how well it’s done is an essential part of improving productivity in this area.
As lenders, many credit unions have become overburdened with new compliance and underwriting requirements. However, this has been somewhat lost in the huge volume associated with the latest refinance boom. As loan volume slows in the future, lenders who maximize productivity in their mortgage offerings will be the winners.
The two main efforts that must be managed — maximizing efficiency and lowering costs — are directly connected. Improved efficiency equals lower operating costs and potentially lower borrowing costs, but how do you monitor and manage these efforts?
With a holistic lending strategy in place during the lowest part of the recession, Wright-Patt Credit Union ($2.5B, Fairborn, OH) and its wholly-owned subsidiary, myCUmortgage, generated an upward trajectory and proved that rapid growth does not hinder productivity.
Image Source: Mortgage Lending Performance Benchmarking Briefing Paper by Prime Alliance, 2012
This strategy included:
In order to improve lending performance, credit unions should concentrate on these three areas:
Tim Mislansky is President of myCUmortgage and Senior Vice President for Wright-Patt Credit Union. He sits on the ACUMA Board of Directors, is an active member of Prime Alliance Advisory Council and serves on several local non-profit housing boards. Tim has over 20 years of credit union experience. He can be reached at (877) 630-3399.
Built, owned and operated by one of the nation’s most successful credit unions, myCUmortgage has been providing mortgage solutions to credit unions for more than 10 years. As a result of working with us, our credit unions partners have saved millions of dollars and have added tremendous value to their membership.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at email@example.com or 1-800-446-7453.
January 7, 2013
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