ATLANTA-Credit unions seeking a larger foothold in mortgage lending have by necessity also had to turn to third-parties to play a larger role.
Such moves increase a variety of risks, beginning with loan quality, and also including handling of the file itself and the service levels credit unions take pride in maintaining.
Some CUs Lack Infrastructure
"Lots of credit unions don't have the infrastructure to support mortgage lending," said David Green, president of the StoneHill Group here, which is seeking to expand its presence in credit unions. A 30-year veteran of mortgage banking and real estate, Green stressed that the "first and foremost" issue is quality control.
In StoneHill Group's case, it provides the "guts" of the mortgage lending operation, but not the origination or the servicing. "Everyone says it, but service is the main thing we provide," said Green. "We are a variable cost alternative to staffing full-time people. We have a very consultative staff."
Quality control includes use of fraud prevention tools, added Green. "Every credit union board has its own appetite for risk," he observed. "But sometimes boards don't have a lot of knowledge of the inherent risks (in mortgage lending). Repurchases and put-backs have put a lot of small companies out of business. Some credit unions in the past have gone to a total outsourcing environment. We don't do it, and we don't' want to."
Green said that if a credit union starts cold with StoneHill Group it can new mortgage operation up and running within two weeks. "Our turn time will not exceed 45 days from the time we receive the file," he added.
The company reports it can implement a complete loan processing and tracking system within 30 days to handle volumes exceeding 3,000 files per month. Among other services it provides quality assurance, due-diligence, FHA insuring and fulfillment.
