EL PASO, Texas -
But a number of CUs told Credit Union Journal that they are staying strong with lending technology that helps them close loans more quickly and cut loan costs.
FirstLight FCU here has cut indirect loan costs by 37% since 2005-and technology was a "major factor," said Wayne Condie, VP-lending at the $490-million CU. Loan volume rose $46 million in 2005 and $35 million in 2006, while staffing remained fixed, he added.
How does Condie explain what lending technology has done for FirstLight? Loan-to-value and debt-to-income ratios are now calculated automatically, loan officers fill out less paperwork, and "excellent reports are available instantaneously," he said.
FirstLight rolled out Teres Solutions SAIL lending software for indirect contracts in 2004 and SAIL for additional consumer loans in September.
At FedChoice FCU in Lanham, Md., the lending staff is no longer breaking its neck to manually enter online applications into the host system, according to Sharon Ostrander, projects administrator at the $206-million CU. The FedChoice online lending solution, provided by eCU Technologies, automatically feeds into the CU's core system, Ostrander continued.
"Because of this automation, we have been able to implement automatic approval for our consumer loans," she said. "Tying the systems together allows us to use basically the same auto approval criteria online as we do for members who contact our call center or branch staff."
The online channel delivered a 7.7% spike in consumer applications in 2005 and another spurt of 6.3% last year, said Ostrander. "The solution is giving us the opportunity to close the deal on more loans," she added.
Both FedChoice and Salt Lake City-based Beehive CU have tweaked their online membership application tools in order to allow new members to simultaneously apply for pre-approved loans online; thus, new members are instantly turned into new borrowers. The $177-million Beehive uses the MeridianLink LoanPQ platform.
CUs that use the Greystone Residential Funding mortgage solution are reporting fast pre-approvals and closings because of advanced, yet easy-to-use, underwriting and workflow tools provided courtesy of the company's technology engine, PCLender. Pre-approvals take less than 15 minutes and closings less than two weeks at $457-million Advantis CU and $40-million Shipbuilders CU in Manitowoc, Wis.
"With other providers, it was taking 30 minutes and three to four weeks respectively," said Darin Walding, real estate loan officer at the Portland, Ore.-based Advantis CU.
Greystone's integration with the mortgage loan software at Connexus CU in Wausau, Wis., has played a part in the credit union closing more loans in two months than it did in the one year prior with a previous partner, according to Boyd Gustke, chief lending officer at the $206-million CU.
VyStar CU in Jacksonville, Fla. has reduced loan decision time "dramatically," according to Kathy Bonaventura, chief lending officer, VyStar Credit Union. Loan approvals that once took 30 minutes now take 10 minutes or less, she said.
VyStar's fully-automated loan origination process comes courtesy of the APPRO system from Equifax Enabling Technologies. The $3.2-billion CU now experiences consistent risk decisioning at the point-of-sale and can smoothly transfer new loans to the core system, said Bonaventura.
In general, CUs are falling behind banks in regards to mortgage closing technologies, in part because of inferior mortgage document systems and electronic document delivery, according to The Cornerstone Report: Benchmarks and Best Practices for Credit Unions 2006, published by Scottsdale, Ariz.-based Cornerstone Advisors.
However, credit unions are keeping up with online lending technologies, beating mid-size banks at originating consumer loan application over the Net, the report said.
FOR MORE RESOURCES
Read more about lending technology and strategies at cujournal.com by searching the following bolded terms in the archive:
Cambrian CU, for a story on lending efficiencies gained at Cambrian CU from business process management tools.
Lending Strategies, for a story on expert recommendations on improving loan performance in 2007.
Automation Helps CU, for a story on how an automated solution helped double home equity loan volume in one year at First American CU.
For More Info On This Story:
* Advantis CU, www.advantiscu.org
* Beehive CU, www.beehivecredit.com
* Connexus CU, www.connexuscu.org
* FedChoiceFCU, www.fedchoice.org
* FirstLight FCU, www.firstlightfcu.org
* Shipbuilders CU, www.shipbuilderscu.com
* VyStar CU, www.vystarcu.org
