Six Tips To Maximize Service And Profits In Your Mortgage Program

Operating a mortgage program in your credit union is no small task. It involves a great investment of time, effort, and money. Following are some useful tips to help your credit union realize its best potential in the service and profitability of first mortgages.

 

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Operating a mortgage program in your credit union is no small task. It involves a great investment of time, effort, and money. Following are some useful tips to help your credit union realize its best potential in the service and profitability of first mortgages.

TIP #1: If you're not in the mortgage business yet, get into it now!
There is plenty of evidence to suggest that the way to a members' share-of-wallet is through their mortgage. Don't miss out on this opportunity to build a lifetime relationship with your member, just because you're not in a position to do it yourself. There are excellent resources available to help you meet your members' mortgage needs. Worried that you missed out on all the action from the re-fi boom? Not a problem - with rates remaining low, there's still great business out there.

TIP #2: Consider outsourcing all or part of your operations.
Whether you're starting a new mortgage program or you've been running one for years, consider the benefits of outsourcing. A review of how you're utilizing your resources could produce interesting results. How much is each step of the process costing in staff, technology, and compliance? Could I use those resources more efficiently in the credit union? Am I able to adjust to the ebbs and flows of business with my existing staff? How much do I need to invest o keep pace with technology and compliance? Am I offering my members the best possible first mortgage solutions? Experts in these areas could alleviate your problems and generate a positive income stream into your mortgage operations.

TIP #3: Don't limit your product offerings to what you could hold in your loan portfolio or process in-house.
Your members probably have a wide variety of needs when it comes to their mortgages. Some will want a 15 year fixed rate product, others will want a 5/1 ARM, and many others will opt for a traditional 30 year fixed rate mortgage. There will be others too who require programs that accommodate blemished credit and low down payments. By turning members away for lack of product, you're sending them a mixed message: ''come to us for all of your needs, but only if those needs meet our needs.'' Instead team up with a resource that allows you to say ''YES!'' to more members, while selling the loans you don't want in your portfolio to the secondary market.

TIP #4: Use your mortgage program to enhance your ALM strategies.
Matching long term assets and liabilities, managing credit and interest rate risk, and every other requirement of your ALM policy could be a daunting task. Use your mortgage program to achieve your goals and stay within your policy limits. The secondary market is a great tool to balance the average life of your portfolio, as is the use of adjustable rate mortgages. A good service provider will help you to wisely price your mortgages and promote the loans that accomplish your ALM goals. Credit risk is easily addressed with access to the appropriate investors and the use of mortgage insurance.


TIP #5: Don't sell your members to a bank.
Consider very carefully before you sell your loans, leads or mortgage servicing to a bank, in exchange for cash compensation. How much is that member really worth to you? Financial institutions that approach you with this type of offer will certainly make money on the transaction, but this may not be the big pay-off. Will they solicit your members for home equity loans, credit cards, auto loans, money market accounts, etc.? Are you actually selling your most profitable members? There are other business arrangements available that will create good income for the credit union while maintaining your relationship with your member. (See TIP #6)

TIP #6: Work with a provider who could offer you all of the above benefits and the flexibility to create the mortgage program that meets your credit union's needs.
Your credit union is not ''just like all the rest''. You need to work with a business partner that offers great mortgage solutions, access to a wide range of products and investors, innovative technology, and a focus on member service.

CU National Mortgage provides mortgage services to credit unions across the nation, working with new, emerging credit union programs as well as some of the largest, established mortgage providers in the credit union industry. Call us today at 1-888-900-1643, ext. 1024 to learn more about maximizing your mortgage program

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 ads@creditunions.com or 1-800-446-7453.

 

Sept. 29, 2003


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