Make The Most Of Mortgages

Mortgages comprise more than 41% of the credit union industry's balance sheet. As new regulations take form, the mortgage business is more complex than ever before.

 
 

As of mid-year 2015, mortgages comprised more than 41% of the credit union industry's balance sheet and accounted for more than $310 billion. But as new regulations take form, the mortgage business is becoming more complex than ever before.

When the Consumer Financial Protection Bureau (CFPB) announced in November 2013 it was streamlining four different documents — including initial and final Truth-In-Lending disclosures, Good Faith Estimates, and HUD settlement statements — into just two, commonly referred to as TILA-RESPA Integrated Disclosures (TRID), financial institutions were shocked to discover they’d have only until Aug. 1, 2015, to comply with this new standard.

Although an administrative error later caused the CFPB to move the TRID effective date to Oct. 3, credit unions across the country have already started reaping the fruits (or potentially, the lack thereof) of their preparation for this changeover.

In "Your Post-TRID Checkup," State Employees’ Credit Union shares how it prepared its 1,800 certified mortgage loan originators for TRID changes. Then, Amanda Phillips, director of compliance offerings counsel for Accenture Mortgage Cadence, breaks down six “sticky-wickets” credit unions will need to manage in the early stages of TRID.

With a footprint that includes four of the 10 most populous counties in Colorado, Ent Federal Credit Union is the largest financial cooperative in the Centennial State. The credit union’s real estate portfolio comprised 65.28% of its total loan business as of midyear. What’s more, nearly 7.5% of its members have a mortgage with Ent compared to 5.41% and 4.90%, respectively, for its state- and asset-based peers.

In the Q&A "Marketing Tips For Real Estate Mastery," Ent leaders discuss how the credit union drives awareness during the home-buying process as well as how it plans to further develop this outreach.

It’s unclear when or by how much the Federal Reserve will change the Federal Funds Rate, but the potential for a near-term rise looms. In anticipation of that inevitability, cooperative lenders such as Las Vegas's Silver State Schools Credit Union are transitioning their mortgage portfolios to capture more purchase money.

Currently, more than 50% of the credit union’s mortgage production is purchase, says Steve VanSickler, chief credit officer. Going forward, he’d like to see that number closer to 80%. To help make that goal a reality, the credit union introduced its Realtor Cash Rebate Program in the first quarter of 2014. To learn more about the self-built program that gives homebuyers a break and provides real estate agents another avenue to source clients, read "To Power More Purchases, Try A Realtor Rebate."

There’s nothing wrong with a straightforward approach to home lending, as demonstrated by the healthy real estate growth the credit union industry is posting. It’s an exciting time to be a lender, but as the national market rebounds and prices steadily climb, not all members are satisfied with the available home inventory.

In some regions, niche loan products such as construction loans and jumbo mortgages are providing homebuyers with better options to finance their distinct visions of homeownership. Even better, these products often increase the issuing credit union’s return on investment. In "A Home Apart From The Norm," learn how two credit unions developed successful niche mortgage products to satisfy the needs of their memberships. 

Happy Reading.

 
 

Nov. 2, 2015


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