CUNA Mortgage Forms Entity To 'Leverage' Collective Strength

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CUNA Mutual Mortgage Corp. has formed a new entity, SHAREX, to help credit unions, CUSOs and leagues maximize their mortgage business opportunities by leveraging the mortgage lending activities of the entire CU movement.

"By combining the full strength of the movement's collective mortgage business, SHAREX will allow for the creation of economies of scale that can lead to discount pricing for all participants," the company said.

The new entity will offer mortgage servicing, compliance, reporting, secondary market delivery and bundling of services to member CUs.

"We've created SHAREX to drive down the expenses credit unions pay to bring mortgage loans to their members," said Jim McCourt, SVP-home ownership solutions for CUNA Mutual. "The savings we realize will make credit union-offered mortgage loans much less expensive than those from other providers. That will allow credit unions to use that savings to market their mortgage services and capture a bigger share of the mortgage lending business."

CUNA Mutual said the savings to participating CUs will be immediate because the cost of servicing mortgage loans is driven primarily by the size of the portfolio, and SHAREX will combine member CUs' mortgage servicing with the portfolio currently serviced by CUNA Mutual Mortgage Corporation.

Organizers say they have had discussions with a number of interested credit unions, including Washington State Employees CU, Olympia, Wash. "We look at it from a cost control standpoint," said Chris Michalak, servicing manager at the $1.1-billion CU. "It's more economical for credit unions to subcontract for servicing, especially in our case where we have non-standard regions and we can write more loans without hiring additional staff."

Membership in SHAREX will cost $1,000 until Dec. 31, 2004. After that, the cost will jump to $2,500 per year.

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