GLENDALE, Colo.-Mortgage lending will continue to be a bigger part of credit unions' portfolio in 2010 and going forward, according to Rick Seehausen, CEO of LenderLive.
With brokers' marketshare falling to around 15% from a high of 65% at the peak of the boom, half of the marketplace remains wide open for other players to mark new territory-but if credit unions don't fill that gap, someone else will Seehausen warned.
"That presents a big opportunity for CUs to enter that space, stake a claim to market share and grow their lending side of the business," he explained. " [And] if you're providing a mortgage to your member, then you have a greater opportunity for other instruments. If credit unions don't grab their fair stake then they will be giving that up to the megalenders. And if you give that up to the big banks, those banks are going to cross-sell checking accounts; if [CUs] don't act on this opportunity to get marketshare, they may find themselves losing marketshare elsewhere."
Interest rates are unlikely to go anywhere this year according to a number of industry experts, but that should not discourage CUs from accelerating their home loan plans. Establishing secondary market access to offload those loans is critical today as the low rates present significant longer-term interest rate risk. Seehausen believes the government will continue to encourage new and refinanced mortgages, and he encouraged CUs to ride that wave; once the intervention begins to subside, rates will almost certainly rise sharply and allow credit unions to put more of those loans on their own books.
With half of the market up for grabs, credit unions must find ways to put together high quality mortgage departments and do so efficiently. Seehausen said vendors like LenderLive give CUs "scale and expertise and state of the art technology solutions that wouldn't otherwise be made available to smaller institutions" that will allow them to capitalize on the current environment.
