Web-Based Originations Keep WCCU In Game

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Credit unions are part of a crowded house of mortgage lending competitors, but Westerly Community CU believes that technology may give its award-winning mortgage department a fighting chance.

The $140-million CU's latest brainstorm is to use its web-based origination platform to make some mortgage money selling loans for another area credit union, said Jeanne Abate, assistant vice president of lending at Westerly Community.

That's good news for Westerly Community CU, because market share of the first mortgage markets by credit unions slid during 2005, according to the NCUA. CUs own less than 2% of the mortgage market, the lowest share since 2000, the agency reported.

Westerly Community's volume reflects the general trend. A winner of CUNA Mutual Group's Excellence in Lending Award for 2004, the credit union averaged $3-million per month in first mortgage loans in 2003, according to Abate.

One year later, monthly volume declined to an average $1 million, said Abate. This year, the CU is bringing in about $500,000 monthly.

Still, Westerly Community is ahead of its peers in the home equity department, she said. Home equity loan growth at Westerly Community for 2004 was 11%.

Remaining Resilient

Abate said her origination platform has a lot to do with the CU's resilience. In 2002, Westerly Community launched Mortgagebot PowerSite, a web-based online origination system.

The 14,000-member CU originates more than 90% of its mortgage loans through Mortgagebot, Abate said.

Mortgagebot enables online members and loan officers to get rate and fee quotes, complete a short, secure mortgage application and get instant loan approvals, all in less than thirty minutes. Mortgage application data collected on Westerly Community CU's website is then automatically downloaded into its loan processing system.

The CU's technology stands alone amongst the local competition. None of the banks or other CUs serving Westerly Community's FOM offers online origination, Abate said.

"We have an edge because our members can apply online, and don't have to call in or print an application," she explained. "Prior to Mortgagebot, many of our members were using LendingTree (an online lending company)."

With the web-based platform, the three-branch CU can reach out to remote members -and even secure new members as customers apply for mortgages online.

"We advertise to a broader audience with Mortgagebot," Abate said. "Previously, there were people in parts of Rhode Island and Connecticut that we weren't able to tap because they couldn't apply online."

The collaboration to sell Connecticut Community CU's loans, which began late last month, should also be a win-win situation, she said.

Connecticut Community CU's members and employees will click and be directed to Westerly Community's Mortgagebot site, Abate explained. Mortgagebot provided the application link at Connecticut's site, as well as a co-branded design.

"We will receive an email whenever there is a 'hit,'" she said. "And Connecticut will also receive notification.

"This is a unique chance for Connecticut Community to grow their mortgages and income and for us to grow [its] revenues by selling their loans," Abate continued. Two more credit unions have also expressed interest in co-branding with Westerly Community CU.

Staff Departs, But Not Volume

Because Mortgagebot has streamlined Westerly Community's lending process, the CU has been able to insulate itself somewhat from the industry's decline in volume, said Abate.

"During the downturn in 2004, we lost a lot of our lending staff to other companies. If it weren't for Mortgagebot, I wouldn't have been able to keep up with the closing, processing and underwriting," Abate said.

With the web-based origination platform, the CU has also stationed one of its own loan officers at a nearby Re/Max real estate office. Although the relationship hasn't been exactly lucrative, Abate said that even if Westerly Community "closes a couple loans per month through the Re/Max office, then we're a couple loans ahead of where we were."

In addition, the Mortgagebot platform accommodates Westerly Community's expanded product mix, including subprime loans and niche products such as 100% financing.

CUJ Resources

For additional information:

* Westerly Community CU at www.westerlyccu.com

* Mortgagebot at www.mortgagebot.com

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