If you’re offering mortgages, you’ve got earning potential. After all, isn’t that one reason you started offering mortgage lending at your credit union? But just “offering” mortgage lending doesn’t result in hundreds of members flocking to your door for a loan.
Credit unions tend to fall into a trap when it comes to mortgage lending. Sometimes, they go through a broker or other local lender. But these sources can send members to alternative financial institutions for other financial products. Another common practice is to train general staff to originate mortgage loans. But when employees aren’t qualified to work on the complexities of mortgage lending, it can be frustrating for both members and employees. A third option is to hire qualified mortgage originators to help members with homeownership.
Although it may seem like you’re unnecessarily spending money by hiring a mortgage lending expert, such a step actually increases your earning potential. Qualified mortgage originators are an asset because they have valuable experience and can help members feel at ease with the lending process.
Dynamic Federal Credit Union ($17M, Celina, Ohio) began offering mortgages to its 3,500 members in 2005. It started with a part-time mortgage originator and partnered with myCUmortgage, a credit union service organization that empowers credit unions to help members with homeownership.
The first year, Dynamic originated two loans totaling $106,000. In 2009, it originated 150 loans for a total dollar amount exceeding $14 million. So far this year, Dynamic FCU has originated 47 mortgage loans totaling more than $4 million.
This success didn’t happen as a stroke of luck; it was based on the credit union’s business goals, size, and anticipated volume of mortgage loans. The leadership team, led by CEO Diane Rodriguez, made the commitment to grow mortgage lending. As a result, an impressive 7.5% of its membership has a mortgage loan with the credit union.
Two years ago, the credit union hired an experienced originator to focus on mortgage lending. This helped the credit union grow a third staff position to take applications, process, and close mortgage loans. Today, there are three loan officers involved in mortgage lending and other duties and responsibilities.
The hiring, developing, and training of staff in mortgage loan originating, processing, and underwriting is a key approach to maintaining contact with members while limiting staff costs. Utilizing the myCUmortgage processing and underwriting expertise, along with the CUSO’s technology platform, enabled Dynamic FCU to increase mortgage volume quickly when the business and economic environment presented opportunities.
Tools for growing a successful mortgage portfolio:
Focused employees — Employees, and even the Board of Directors, have passion for building the mortgage business. Innovative mortgage promotions help keep product information fresh and in front of the members.
Cross-train to cross-sell — Mortgage originators are trained on other products, such as home equity loans, to inform members of the benefits of home improvement. This successful endeavor benefits Dynamic FCU’s future loan growth and interest income.
Relevant products — Given the community’s rural demographics, the credit union has been successful in offering rural housing loans.
Increase your earning potential by putting the right people in the right positions. Consider a qualified third party source to help you streamline the mortgage process. It’s a competitive landscape in the mortgage business, but credit unions are gaining market share and have incredible earning potential.
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