DALLAS-Mortgage origination provides credit unions with important fee income, brings interest-earning potential, and ultimately builds membership loyalty, reminded Linda Clampitt.
"While it has become more difficult to be involved in lending, it is more costly to miss out on the great opportunity available," said Clampitt, SVP at CU Members Mortgage. The best way for CUs to boost the bottom line is to accurately evaluate the credit union's current mortgage program and assess its profitability, Clampitt advised, saying the questions CUs should be asking themselves include "is the mortgage department truly turning a profit? Are compliance burdens becoming too costly or too time consuming? What is the true cost of REOs and repurchases? Are managing staffing levels becoming too large a burden?"
"Ultimately, these questions lead a credit union to ask itself, are we mortgage lending experts?" she said. "After an honest assessment, the credit union should decide what mortgage lending strategy makes the most sense."
In many cases, Clampitt said CUs will find having an experienced partner to take on some or all of the responsibility will greatly reduce expenses and build greater net fee income. "And it will lighten the compliance burden on the credit union."
