LAS VEGAS-Through September 2010 credit unions had an all-time record 4.86% of total U.S. mortgage originations, which gives Bob Dorsa reason to be optimistic about 2011.
Dorsa, CEO of the American Credit Union Mortgage Association (ACUMA), said the figures from the first nine months of last year topped his expectations, especially given all the challenges credit unions are facing. He cited the Mortgage Bankers Association's forecast that total originations in 2011 will decline to slightly less than $1 trillion from $1.4 trillion in 2010.
Dorsa is projecting the country's CUs will book $50 billion in mortgages in 2011 after booking $56 billion through the first three quarters of 2010.
"What is critical is rates are starting to tick up," he said. "Many mortgages either are cash deals or distressed properties, which makes the pie smaller. But if we can at least not go backwards and finally make some inroads in the purchase market, that would be good."
Dorsa said CUs must continue to increase their reach into mortgage lending, asking, "Where are credit unions going to get enough money to pay for all their expenses and NCUA assessments? If not real estate loans, where are we going to do this?"
'Someone Has To Do It'
For starters, he said 2011 should be named "The Year of the Credit Union."
"Someone has to do it. We need new enthusiasm and passion and we need to get serious about our business," he declared. "We are down to 7,000 credit unions, so we need to set a goal of getting five-million new people to join credit unions. People spend more time shopping for a laptop than they do shopping for a mortgage, which makes our problem a lot tougher."
Dorsa said he was pleased CU mortgage market share has reached nearly 5%, despite a decline in originations from 2009, but lamented the fact half of credit unions still do not book mortgages.
"There are 100 CUSOs that do mortgages, plus aggregators, so there are options available to the credit unions that are not participating at this time," he pointed out. "Executives at credit unions that are successful at mortgages get it, and they have a strategy that identifies refi and purchase money. They understand the origination side. They use the mortgage loan to cross-sell other credit union products."
At the root of the mortgage issue, Dorsa continued, is he fears CUs are not taking full advantage of the relationship a credit union has with its members.
"I feel part of the problem is the territorial issues within the credit union, between marketing and lending. We only have a 5% market share and this is not because we don't know how to do loans. It is an advertising and communication deficiency. Marketing and lending departments must work in sync."
