In 2012, Wright-Patt Credit Union ($2.5B, Troy, OH) processed about 1,200 purchase mortgages, which made up a third of their mortgage volume for that year. Even for a leading credit union, this was an exceptional record. The year’s figures set a new precedent, outpacing the credit union’s prior best annual performance 50%, or by 400 loans.
So what did Wright-Patt executives do right? Did they see any market indicators for such an opportunity? “To be honest, I don’t know that there were any indicators,” says Tim Mislansky, Wright-Patt’s chief lending officer, though he adds that residual negativity towards big banks and the folding of some smaller brokers and mortgage companies didn’t hurt. More to the point, however, the uptick can be better explained by the expansive plan that Mislansky and his team engineered.
Instead of completely relying on rebates or special deals, Wright-Patt’s plan aggressively focused on marketing the credit union as a mortgage lender, specifically to non-credit union members. Rather than appealing directly to those home buyers, the credit union aligned itself with key players in the real estate process, who could funnel these new clients in Wright-Patt’s direction.
Such a comprehensive plan is beyond the sum of its parts. Mislansky simplifies Wright-Patt’s strategy into a few points.
Invest In Mortgage Originators
In 2012, Wright-Patt added to its originations staff and currently employs 17 full-time mortgage originators. Five of these new hires are inside originators who handle loyalty business with credit union members, mostly refinancing deals. The remainder consists of outside originators who proactively initiate nonmember business.
Mislansky advises against using general employees whose attentions are divided among other duties, such as opening accounts or making car loans. A highly specialized trade requires highly specialized skills, along with concentrated time and effort. “Mortgage lending requires expertise,” Mislansky says. “A home is a member’s biggest purchase and needs an expert. That’s why we like to have full-time originators.”
Although hiring full-time employees may seem like a tremendous expense, Mislansky points out that as far as originators are concerned, “most of the associated cost is commission-based. A full time originator can generate substantial loan volume for a credit union and drive revenue to pay the originator and create fee revenue for mortgage loan sales.”
Wright-Patt’s originators are also tasked with reaching out to real estate agents and educating them about the benefits of working with the credit union.
Make Friends With Real Estate Agents
“Sometimes credit unions see realtors as not being on the same team as the credit union,” Mislansky says. But the reality is far less complicated: “The realtor wants to get the buyer into a home and have a reliable lender to get the financing done.”
If the goal is to capture more of the mortgage loan business, connecting with real estate agents is a necessity. They are often the first contact for prospective homeowners, and as such, real estate agents wield strong influence over the buyer’s choice of lender and settlement company. “It’s important to have a positive relationship with Realtors so that the credit union is at least one of the choices offered,” says Mislansky.
But finding ways to reach out to Realtors requires a bit of creative initiative, such as combing through the membership base and reaching out to members who are real estate agents. Or, as Mislansky and his team have done, make strategic alliances. Since 2003, Wright-Patt has worked with CU Realty Services, a national credit union service organization (CUSO) that helps credit unions increase their mortgage lending by providing a group of Realtors for credit unions to work with.
But Mislansky didn’t just stop there. In 2012, Wright-Patt further broadened its access to real estate agents by establishing a marketing agreement with Irongate Realtors, an established real estate company based in southern Ohio. The alliance gave Wright-Patt access to Irongate’s more than 300 local agents, who in turn marketed the credit union as a mortgage lender to home buyers. Wright-Patt’s loan officers are stationed at every one of Irongate’s six offices, in effect creating a one-stop home-buying center.
Wright-Patt and Irongate Realtors have since formed a joint mortgage venture, Southern Ohio Mortgage.
Partner When Necessary
“Mortgage lending has a lot of moving parts,” Mislansky says. “A credit union can benefit from the expertise of a CUSO to help them with mortgage lending.” To that end, Wright-Patt started a CUSO, myCUmortgage, to assist with underwriting and processing loans; myCUmortgage now manages those tasks for all of Wright-Patt’s mortgage business, as it does for other credit unions.
“The CUSO acts as the back office through processing, underwriting, and compliance expertise,” Mislansky says. “The credit union benefits by having lower processing costs from the higher volume of business, which leads to pricing discounts and better efficiencies. ” Additionally, myCUmortgage offers origination and other services for smaller credit unions that lack similar resources.
In the coming year, Mislansky plans to continue Wright-Patt’s strategy of capturing mortgage loans while adding new features, such as home-buying seminars. “We think home ownership is one of the most important things that Americans can still do to build wealth,” Mislansky says. The new year will see Wright-Patt expanding its reach in helping its members do just that.