TUKWILA, Wash.-A number of credit unions have aggressive goals when it comes to their mortgage portfolios.
"Profitability has never been more important for our industry. We must individually and as an industry rebuild profitability and capital," BECU EVP Joe Brancucci told Credit Union Journal. "Mortgage lending creates complex, lucrative, salable assets, much more so than any other loan credit unions can make."
The banking collapse and refinance boom have helped credit unions gain more of a toehold in the mortgage marketplace, but Brancucci believes CUs should shoot for increasing its share to 10% by 2016 from 4.5% today.
But an old challenge remains.
"We have, for years, tried to become a more dominant force in the market, [but] credit unions have not been the first one people look to for a home loan. They look to a credit union for a car loan or a checking account; so we have promoted our home loan program," said Rex Rollo, executive VP at Ogden, Utah-based America First CU.
The $5-billion credit union saw its home loan volume soar last year after is focus on real estate lending in the last several years allowed it to become a "major player" in its market. Its market penetration has been greatly aided by its reputation a low-cost provider, offering competitive rates as well as an origination fee (0.5%) that is half of the competition's.
The financial crisis that gave credit unions the opportunity to build trust with their communities and now is the time to capitalize on it, according to Jon Paukovich, VP of mortgage lending at Colorado Springs-based Ent FCU. He remains focused on the purchase market regardless of conditions nationwide.
"Part of our strategy is continuing what we've been trying to build for almost a decade and that's a greater emphasis on a Realtor market," said SVP/Chief Lending Officer Bill Vogeney, also at Ent. "While refinances come and go based on which way the rates go, purchases tend to be a little more steady."
Paukovich noted that the $3-billion CU has external loan officers concentrating specifically on building contacts in the business community, especially with Realtors.
"Historically credit unions tend to sit back and wait for refi booms, and as things normalize we tend to lose marketshare," he added.
