Callahan Clients, please log in for direct access to:
Learn What You're Missing
Upgrade Your Subscription
Thank you for your interest in reading the fantastic content we have on CreditUnions.com! However, the page you are trying to access is for subscribers-only. To learn more, select an option below.
All users must now log in to read, research, browse, and have fun on CreditUnions.com. Yes, we still offer freebies. And, yes, it’s worth the extra effort.
Print or PDF this article today because you won't have access to it later. Or, click here to learn how to get 24/7 access.
By Mortgage Cadence
''We're making more purchase-money loans this year than last,
and the refinance market is stronger this year,'' says Deborah
Atherton, vice president, real estate lending, at Anheuser-Busch
Employee Credit Union in St. Louis, MO. She adds, ''Not only
are we making more purchase-money loans, we're helping more members
who use our branch network thanks to our new online mortgage system.''
''In 2001, we had three traditional loan officers and an obsolete
online application system,'' says Marilyn Barnes, vice president
of lending at Bethpage Federal Credit Union in Bethpage, NY. ''2002
was a record year for the credit union, and our new approach to
mortgage lending will make us a stronger competitor in the years
Anheuser-Busch Employees and Bethpage FCU are two different credit
unions, yet they have at least one thing in common: they've traded
in the customary approach to mortgage lending for the process pioneered
by Prime Alliance Solutions.
An Archaic Process and Mounting Volume
On January 1, 2002, the mortgage market was more active than anyone
in the business for any period of time could remember. According
to the Mortgage Bankers Association of America, there were no signs
of the boom letting up. Deborah Atherton and the senior management
of $600 million Anheuser-Busch Employees Credit Union knew it would
be another busy year. And with the record volumes of 2001 fresh
in their minds, they knew their existing manner of handling mortgage
loans couldn't meet the needs of their 75,000+ members.
''We weren't using an automated underwriting system of any
kind,'' says Atherton. Applications were taken by hand using
the standard 1003 mortgage application, then processed in the customary
way. Documentation was important to underwriters when approving
loans. ''No question, we documented loans to the point of overdoing
it, just to make sure we could approve a member,'' she says.
''Originating mortgages this way slowed us down to where we
could meet the demands of our members.''
Shortly after the new year, the credit union made the decision
to completely re-engineer its mortgage program working with Prime
Alliance. They were impressed primarily with two of Prime Alliance's
characteristics. First, Prime Alliance credit unions were getting
significant results-especially those with branch networks. These
credit unions let Anheuser-Busch ECU know that, since they became
Prime Alliance customers, they were able to serve more members because
the system is available at any time, any place there is Internet
access. Therefore, branches without experienced mortgage personnel
could take applications.
Second, Prime Alliance was offering a total solution, not simply
a website where members could complete an application. ''Prime
Alliance saves time because it reduces documentation and the time
it takes to close a loan,'' says Atherton. ''The ease of
use makes our members and our branches very comfortable with the
mortgage process.'' Online credit decisions take away much of
the stress from the members. ''Our members and our staff both
win,'' added Atherton.
Did the results meet the expectations of the credit union? ''Yes,
thanks to the truly unique solution Prime Alliance helped us with,''
says Atherton. ''We went from originating loans through a third
party to becoming a direct secondary market seller and an in-house
servicer. We also re-engineered our process during the strongest
mortgage market in history. Our results this year tell us that we're
now serving more members than ever. Since the Prime Alliance approach
is based on an extremely reduced data set, our processors no longer
have mountains of mortgage paperwork facing them, even with the
increased volume we did this year.''
From Two Channels to Many
Members have more demands on their time than ever before. With
rates at their lowest in 40 years, there's suddenly been a new demand-either
refinance an existing home or purchase a new home while the market
is favorable. Busy people want ease, speed and convenience. And
convenience is perhaps the most important.
For $1.4 billion Bethpage FCU's 110,000 members, there were only
two choices until the middle of 2002. First, wait to see one of
the credit union's three loan officers. Or, second, apply online
at the credit union's website. ''Members could apply online,
but we couldn't provide an approval,'' says Marilyn Barnes,
vice president of lending. ''While it looked high-tech, what
we had really done was place an electronic façade on top
of the traditional process.'' Adding mortgage lending capabilities
to the credit union's branches, making it possible for their call
center to take mortgage applications and bringing loan officers
and member service representatives online became a crucial goal
by the end of 2001.
Like Anheuser-Busch ECU, Bethpage FCU turned to Prime Alliance
Solutions in early 2002 because they liked what they saw and were
impressed with the early results of the PA pioneers. Two major components
of their plan were training and marketing. ''Our call centers
and branches were familiar with consumer credit, so mortgage lending
wasn't totally foreign,'' says Barnes. ''We began early
in the year with basic mortgage training. As our new solution was
about to be launched, we then provided training on the Prime Alliance
site and process.''
''While we were training, we were also marketing,'' adds
Barnes. ''Mortgage lending was prominently displayed on our
homepage. We announced our new, broadly available service in our
newsletter, statement advertising and posters in the lobbies of
all our branches.'' The results produced by a well-defined and
executed plan that included process, people, marketing and technology
were and are dramatic. Bethpage went live in early July 2002, on
the day that rates suddenly moved lower.
''We took 50 applications that day,'' says Barnes. ''In
the last six months, our biggest channel for mortgage lending has
been our call center, followed by online applications.''
Bethpage FCU will close double its 2001 mortgage volume of $140
million this year, thanks to its new multi-channel access.
Would Atherton or Barnes want to once again manage a mortgage operation
accustomed to the traditional approach? Only on the condition they
could re-engineer the process and implement a solution like Prime
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 firstname.lastname@example.org or 1-800-446-7453.
February 24, 2003
11/25/2014 04:07 PM
Great article. Thanks for the info, you made it easy to understand. BTW, if anyone needs to fill out a Form 1003, I found a blank form here http://goo.gl/nT7Bfo. This site PDFfiller also has some tutorials how to fill it out and a few related forms that you might find useful.
7/26/2012 04:11 PM
I would like to know if B.F.C.U. handles reverse mortgage?
7/26/2012 03:59 PM
Good article - full of useful details - thanks.
Where are the volume #'s both number and amount ?
Sounds like a commercial for Prime Alliance
The article is very helpful to alert CU's to the opportunities online systems provide to increase mortgage market share and improve efficiency. However, the Prime Alliance system has one major issue that needs disclosed to your readers. Because it is supported by Fannie Mae, Prime Alliance users must agree to sell loans to Fannie Mae only. This may be a serious error for some CU's for whom better secondary marketing solutions are available, and who can access other online systems.
V.P./Mortgage & Business Services
Submit your email address to receive daily industry updates and web-only features.
P: (800) 446-7453 | F: (800) 878-4712
1001 Connecticut Ave. NW Suite 1001
Washington, DC 20036