Member Experience Matters Most

Mortgage lending can be about a lot of different things. Originating, underwriting and closing seem to get a great deal of attention. So does deciding what to do with the loan once it's closed: sell into the secondary market or place it in the credit union's portfolio? If it's sold into the secondary, to whom should it be sold?

 

By Mortgage Cadence

 

Mortgage lending can be about a lot of different things. Originating, underwriting and closing seem to get a great deal of attention. So does deciding what to do with the loan once it's closed: sell into the secondary market or place it in the credit union's portfolio? If it's sold into the secondary, to whom should it be sold? You get the idea, and that's just the first 60 days of a life that could extend past thirty years. All of these queries are important. Yet for a growing number of credit unions these questions are of secondary importance. The primary question has to do with the member experience, since, after all, there's the ongoing member relationship to nourish and foster long past the date the mortgage loan closes. For credit unions, the significant question is this: what will members experience when they come to their credit union for help financing their home?

That's the question that $145 million Midwest Financial Credit Union of Ann Arbor Michigan had been asking for several years. Surrounded by all the major banks that call the greater Detroit area home, the credit union new that it could provide one thing that the competition couldn't: an un-paralled member experience, one that allowed their members to focus on moving into their home rather than closing their mortgage loan. "Our credit union serves the staff and professionals at the University of Michigan's Ann Arbor medical campus, a somewhat transient field of membership. We identified mortgage lending as a cornerstone for building lasting member relationships," said Larry Knoll, President and CEO of the credit union. "What we needed in this highly competitive market was a progressively different way to meet the needs of our time-deprived members," he added.

Focusing on their members rather than on the mortgage proved a successful strategy from at least two different perspectives. "One of our members appreciated so much how easily we handled his loan, and how much money we saved him that he took the time to tell us about it, and now he's telling other members," said Tonya Coon, Vice President of Real Estate for Midwest Financial. "This is just one of the pleasant mortgage lending stories that we've heard in the last year. It's very gratifying to know that we're able to help members realize their dreams," she continued. Title companies in the area noticed the Midwest Financial difference, too. It's typical, even customary, for a lender to deliver loan documents the night before a closing. The title companies that Midwest financial works with are now used to getting the credit union's packages several days ahead of schedule. Lately, Realtors are taking notice as well.

Creating lending intimacy requires lenders to focus both outwardly - - walking the member path - - and inwardly - - looking for barriers and obstacles that unnecessarily complicate the lending process. Hiway Credit Union of St. Paul, Minnesota did exactly that. Two years ago members had two avenues when applying for a loan: face-to-face with one of the credit union's loan officers or through the mail. "Almost daily our credit union was missing the opportunity to help member's finance their homes. We had to find a way to reach them after hours, on the weekends, and over the internet," said Jeff Schwalen, President and CEO of the $600 million credit union. Switching to a web-based origination platform was a solid first step since it opened access for members anywhere they were and at anytime. Step two was removing process barriers, which the credit union did concurrently. "Details of what we did are not all that important, yet the result is," continued Schwalen. "Members notice two differences. Hiway Credit Union's mortgage experience is, in their words, the best. Process improvements also meant we could lower the fees we charge," concluded Schwalen.

Being a mortgage lender these past three years meant primarily one thing: refinancing. Sure, every lender made lots of loans, yet few created a lasting advantage. "We approved loans, mortgage loans, in as little as five minutes during the crest of the refinance wave," said Daniel Milbrandt, Senior Vice President of $250 million Blackhawk Credit Union in Janesville, Wisconsin. Available data suggests that the second quarter of 2003 saw some of the greatest loan application volume recorded during the refinance boom that began in second quarter 2001. "The other lenders in town, all of whom are a great deal larger, were taking much longer, in fact, upwards of several weeks to a month," he continued. "Word about the high level of service we provide, and how simple we've made home financing is spreading throughout our community. Accordingly, a growing number of our members think of their credit union first when they need a mortgage loan," concluded Milbrandt.

Midwest Financial, Hiway and Blackhawk credit unions share several characteristics. By industry standards, none are huge credit unions, yet each is a leading lender in their community. The most important trait they share, and the reason they're getting noticed in their communities is that they've made a commitment to seeing things from their members' perspectives, and building an experience that is not easily duplicated.

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March 1, 2004


Comments

 
 
 
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