It’s no surprise the Internet is the first place consumers go to research purchases… including mortgages. With the tough economy, smart consumers are looking for the most cost-effective and efficient way to buy a house.
Lower home prices mean bargains for buyers. According to a recently released government report, new home sales in March improved at the fastest rate in 47 years. And the National Association of Realtors reports that existing home sales grew by nearly 7% in March. Your members are buying homes; but is your credit union getting its share of the volume?
Surf for a Home Mortgage
Deloitte Consulting evaluated user behavior of buyers looking at applying for a mortgage loan (see Exhibit 1 – The Silver Lining in Lending, May 2008). The top-ranking source was the Internet with 93% choosing to apply online over any other method.
Competing in this space is tough for credit unions that either don’t have a mortgage solution available to members or don’t have the online capabilities to compete in the market.
The growth opportunities for smaller financial institutions are ripe for the taking as consumers look to local, community lenders to help finance their homes. Now is the time to adopt technologies to help automate processes and improve efficiencies for your staff and members.
Technology for online loan applications and mortgage information has been perfected over the years. The technology exists in many forms for even smaller institutions, such as credit unions, to compete online with large national banks. And through CUSOs, credit unions have options that level the playing field with larger financial institutions.
myCUmortgage was established 10 years ago as a CUSO of Wright-Patt Credit Union ($1.8B, Fairborn, Ohio) to empower the credit union industry to gain market share and help more members attain homeownership. Using the Prime Alliance online platform, myCUmortgage provides credit unions a cost-effective, co-branded website for lending officers or members to apply for mortgage loans directly online. In 2009 alone, myCUmortgage helped credit unions generate more than $800 million in mortgages loans, all on the Prime Alliance system.
With a paperless online loan application, loan origination is faster and more cost efficient compared to paper-based processes. Turnaround time is faster because information is real-time and document shipping is eliminated. myCUmortgage reduces the time it takes to close a loan, thereby saving credit unions and their members money.
Choices to Access Technology
As credit unions search for ways to grow their bottom line and help members with mortgage lending, they face the of choice of investing in technology or partnering to access technology. In your evaluation of providers, ask these five questions:
How much money and staff time must my credit union invest to access and maintain the technology?
Does the provider have a solid understanding of credit unions, or better yet, is the provider credit-union owned and operated?
How long does a mortgage solution take to implement at my credit union?
Does the solution provide my credit union with access to the secondary market?
Does the solution allow me to lower my costs to originate mortgages for my members?
Your members are buying homes and they’re researching their mortgage options online before they even step foot in your branch. Where are they going for their mortgage if it’s not to you? Take advantage of available opportunities and best practices to make your mortgage application available online and get it into the hands of your members.