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Members are shocked that University of Kentucky FCU (UKFCU) can now originate and fund home equity loans in five days or less, according to Brad Hudson, call center sales manager at the $186-million credit union.

The credit union's efficiency is paying off as the demand for home equity loan heats up, especially in Lexington's vigorous market, Hudson added.

UKFCU is headed in the right direction, according to advice set by the Needham, Mass.-based research firm TowerGroup. Automating more of the home loan process will help lenders increase their margins during the current mortgage downturn, said a recent TowerGroup report.

Member Complaints

"We were late in the game, because most of our competitors were already expediting the loan process," Hudson added. "In the past, we had quite a few members complain about timeliness."

Securing appraisal and automated valuation models as well as documentation took the CU from two to three weeks, he said.

After a member applied, UKFCU had to order the lien position product from an attorney's office and retrieved data from various websites for automated valuation models (AVM) or appraisals, said Hudson. The CU separately drafted flood determination information, sending data via fax, courier or the Internet.

About a year ago, the 35,000-member CU started using SharperLending's bundled services product to access all mortgage products from one platform.

The credit union can order, store and manage mortgage products from multiple vendors from SecureLending's single secure website. Products include appraisals, mortgage loan reports (MLR) and AVMs, as well as credit, title, flood determination and closing documents. The CU can view, download and print loan reports from any Internet-connected device.

With SharperLending's one-stop platform, UKFCU closes a loan in 48 hours or less, instead of the two weeks it used to take, Hudson said.

Need For Speed

"In today's society, speed is of the essence," he said. "We and our members now have an overall excitement about the ability to quickly process mortgage loans. The bundled product allows the credit union to emphasize that we can do a quicker turn-around time than our competition."

Closing costs can be less than $100 per loan through the bundled platform, he said. The manual process of research and travel can add up to $150 to closing costs per loan, he added.

UKFCU processes more than half of its mortgage loans through SharperLending, using the credit, MLR, AVM and flood determination products, said Hudson.

The bundled product shares data through an Extensible Markup Language (XML) request-and-response process. Credit unions can secure their own data or leave it to SharperLending.

Lenders can choose to set up agreements from a choice of hundreds of vendors, including 14 AVM vendors, nine flood determination vendors, and 10 title vendors, according to David Black, president and Ted Robinson, director of national sales at SharperLending.

In addition, SharperLending can arrange agreements with local title, closing and appraisal vendors, they said.

The MLR is a flat rate, lien position product, Black continued. Thus, the MLR cost is not tied to location or the size of the loan, although the equity loan amount is limited to $500,000, he added.

"We've tried to take the due diligence and minimum volume requirements away from the credit union by aggregating all providers in one location," said Black.

UKFCU grew its home equity loan portfolio by 18% to $28.5 million last year, Hudson said. The portfolio currently stands at nearly $29 million.

The CU offers 5-, 10- and 15-year, fixed-rate home equity loans and a home equity line of credit tied to the prime rate, he said.

CUJ Resources

For additional information:

* University of Kentucky FCU at

* SharperLending at

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