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
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
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
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