Given the competitive nature of the mortgage lending industry, many credit unions are searching for any innovation that can give them an advantage. While the industry has become increasingly saturated with non-traditional mortgage products, some credit unions are betting they can compete on efficiency and better member service by implementing an online mortgage application.
Ent Federal Credit Union ($1.8 billion in assets, Colorado Springs, CO)
Ent executives set a goal to move from being the number three mortgage lender in Colorado to number one. "We wanted to deepen the relationship with our members so that they would think of us first when considering a mortgage," said Jon Paukovich, director of real estate lending. "The online mortgage application is not the silver bullet, but it is a critical piece of the puzzle that integrates well with our marketing and member communication strategies."
The system is set-up to automatically approve members for a loan, but does not automatically deny any application. Rather, the member will receive an e-mail saying that the application has been referred to an underwriter and that the credit union will contact the individual within one business day. Ent offers several types of mortgage products including Colorado Housing loans and various community loans that have lower underwriting standards. "The goal is to keep the mortgage at Ent rather than have the member call someone else," said Paukovich.
After marketing the online mortgage application in local newspapers and to realtor groups, Ent had a record month in August. It saw a significant increase in mortgage volume and is by far the #1 mortgage locally-based lender in Colorado this year.
Virginia Credit Union, Inc. ($1.2 billion in assets, Richmond, VA)
Virginia Credit Union, Inc. initially had an outdated online mortgage application that required the lending staff to manually enter the data into the system. The channel proved to be popular and lending executives determined there was sufficient member usage to justify an upgrade. The advantages were that the automated online mortgage application offered instant approval and a shorter turnaround time as well as several features including a rate tracker and relevant informational material for members.
To ensure that the impact of the online application tool was realized across the credit union, it was recently rolled out to its branches and call center. Executives mandated that the online mortgage application process be used by all staff, training front-line employees how to use it and answer frequently asked questions. "The online mortgage application process gives our branch employees confidence in dealing with members," said Broke Graham, vice president of lending. "It has made the application process much more efficient."
The results are strong as well. Purchase loans are up between 15-20 percent this year and approximately 40 percent of mortgage applications are completed online.