Prepare For The Next Refi Boom

How can credit unions use the drops in 30- and 15-year fixed mortgage rates to deepen member relationships?


Thirty-year fixed mortgage rates dropped to near record lows (4.32% average) and 15-year fixed rates dropped to new record lows (3.50% average) the week of August 15, 2011. Early reports from the Mortgage Bankers Association show a +22% jump in mortgage applications the week beginning August 8, 2011. According to the MBA, refinancing comprised more than 75% of all mortgage loan activity, up from 70% the prior week.

30 & 15 Fixed Mortgage Rates

For many credit unions, the fluctuating mortgage market is still a relatively new business. Often, credit unions struggle with keeping the right amount of business resources in place to manage cyclical changes in the market. But credit unions that manage risks and resources the best also manage to deepen member relationships and strengthen their organizations in the long term.

For some credit unions, collaborating with a mortgage CUSO serves as both a member and business advantage. It gives the credit union an opportunity to offer mortgage services in a quick, convenient, and credit union-centric way. Mortgage CUSOs can manage all of the resources (staffing, systems, compliance, etc.) required to maintain service levels while credit unions manage the member relationships.

Mortgage Program Needs To Consider

Staffing levels in a fluctuating mortgage market. Maintaining efficient and expert mortgage staff can be difficult. This is why there are so many mortgage-lending organizations that specialize in mortgage lending only. Consider a specialized mortgage CUSO to manage staffing for you.

Maintaining mortgage business competencies. There are many different mortgage products on the market. Not all of them are right for your credit union or your members. Don’t offer your members programs that don’t fit your credit union’s values, and ensure you do offer all of the programs that do.

Managing evolving compliance and regulatory requirements. The regulatory landscape continues to change. It is of the utmost importance you remain in compliance and reduce risks. Mortgage CUSOs can be helpful at ensuring your programs meet all the rules, regulations, and standards.

Mortgage system technologies. When it comes to a mortgage loan, your members want the best rates, conveniently and quickly. The technology behind the mortgage program can make a significant difference in the cost and time it takes to complete a mortgage loan. Mortgage CUSOs came from credit unions and often bring the best technologies in the business back to their credit union programs.

With rates near or at record lows, the opportunity for the next refinance boom is out there. Prepare your credit union to manage every opportunity to serve your current and future members through a risk-appropriate program that is efficient and affordable. As we have seen, if credit unions can’t serve members’ mortgage needs, some other lender will.




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