Taking IT Off The Street

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If you build a mortgage loan program in-house, they will come.

Consumers Credit Union moved mortgage tools in-house in 2004, investing more than $40,000 in technology and about $6,000 for annual maintenance, according to Scott Sylvester, vice president of technology at the $170-million credit union.

That was a wise move, if you listen to analysts such as TowerGroup, a Needham, Mass.-based financial services consultancy.

Credit unions should spend big on mortgage technology in order to kick the competition, according to TowerGroup.

Banks are keen on using technology to keep mortgage loans and even the hallowed auto loan from CUs, TowerGroup Research Director Craig Focardi recently told attendees of the American Credit Union Mortgage Association conference in October.

Credit unions currently hold 2% market share of mortgage originations, according to Callahan & Associates and the Mortgage Bankers Association.

Consumer's technology is paying off, Sylvester said.

Same-day loan approvals are one of the results, made possible by the interface between the loan production platform and the CU's other systems. Application data flows directly from Consumers' loan production platform to the servicing and core systems, making decisions easier and more accurate, said Sylvester.

"There are so many places out there now where you can get a streamlined mortgage," Sylvester said. "So, now, if you're going to do it, you've got to do it quickly. We're getting back to the member with decisions on the same day.

"Better service can come from faster speed, and faster speed comes from the technology."

In addition, Consumers is the only local credit union offering mortgages online, he said.

"Previously, our mortgage program was referral-based as part of a CUSO," Sylvester continued. "Our referrals may or may not have followed through with the CUSO, and it was very difficult for us to follow-up.

"Besides," Sylvester chuckled, "we were referring half of the mortgage business, but as part-owners of the CUSO, we saw our piece of the pie sliced up four ways."

Consumer's web-based loan production and servicing modules give the credit union the power to eat all of the pie, said Sylvester.

And because the modules are web-based, there's no maintenance headache for IT, he said.

"Setting up a mortgage department from the ground up was an easy transition for us," he continued. "We were doing mortgage applications in-house within two months."

The transition was fairly painless in part because of the interface between the mortgage tools and the core system, he said.

"Member service is easier because we have true integration between the two products," Sylvester said. "Even a teller can resolve mortgage inquiries through the core system, instead of referring the member to a loan officer who would have to use separate software to resolve the issue."

Training employees to use the Windows-based production platform is also a breeze, he said. "It's easy to install and set-up, and it's easy for employees to control the software without IT support."

Immediately after the conversion, Consumer's 23,000 members were more willing to borrow, knowing that Consumers not only referred, but originated, processed and serviced their mortgage loans, Sylvester said.

"Finally, members could sit down with the people they know in the office and fill out the mortgage applications," he explained.

No more relying on a third-party to drive the credit union's service and sales culture, Sylvester added.

"When our program wasn't in-house, we just couldn't keep our hands on member service," he said. "If there was bad service to the member through the CUSO, then it reflected badly on us at the credit union." The four-person mortgage department closed 232 mortgages worth $32,066,054 last year.

Consumers uses the INTERLINQ loan production and servicing modules and ULTRADATA core system provided by Pleasanton, Calif.-based Harland Financial Solutions.

CUJ Resources

For additional information:

* Consumers CU at www.consumerscu.org

* Harland Financial Solutions at www.harlandfinancialsolutions.com

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