Since the turn of the century, Internet banking has quickly become a standard for financial institutions of all sizes. Consumers today expect their savings institution to provide online bill payments and online access to their retirement accounts and investment portfolios.
Most credit unions have managed to keep pace with this trend-with one notable exception. Compared to the nation's leading banks, CUs are not utilizing the Internet as a way to help them grow their mortgages.
For credit unions that hope to capture a greater share of mortgage volume, meeting consumers online at the point-of-sale has never been more important. Recent surveys indicate that three-quarters of all consumers looking for a mortgage will take their search online. And these folks are extremely savvy-they want to know everything, including the rate and the closing costs, before they even think about picking up the phone and talking to somebody. If your members are shopping for homes, rest assured they are already checking your website for products and rates, and if they don't find what they're looking for, they will look elsewhere until they do.
That means your credit union is in direct competition with the nation's largest banks-which are already providing fully virtual mortgage origination experiences for consumers, including the ability to shop and compare loan products and prices online.
Today, the cost to set up a web-based mortgage origination platform has fallen to a fraction of what it previously took to build one from scratch. The technology itself is easier to use and more powerful than ever, and providers are starting to drop the long-term contracts that credit unions and banks had to sign. Today, there's nothing stopping even a small CU from getting an online mortgage platform-one that features a state-of-the-art product and pricing engine that's on par or even superior to the nation's largest banks-except perhaps a clear explanation of the benefits.
Online Solutions Help Track, Monitor Progress
First and foremost, online mortgage solutions can help managers keep track of the volume of rates, adjustments and guidelines that change every day. Recent advancements in product and pricing engines, also known as PPEs, allow anyone involved in loan production to take a borrower's criteria and evaluate it across all of their loan products in order to immediately identify the most competitive products. Much of the data that flows through PPEs is now changing in real time, which reduces lag times during the origination process and ensures that the product and rate that members see is what they can actually get.
Online mortgage platforms can also provide safeguards for adhering to the industry's constantly changing rules and guidelines. With the astounding number of non-performing loans and the potential for fraud, compliance is a huge issue in today's market. Current solutions allow you to calculate required APRs along with underlying fees, in addition to creating Good Faith Estimates that are compliant with new Real Estate Settlement and Procedures Act rules that went into effect on Jan. 1. Some advanced solutions can even ensure compliance with underwriting guidelines for different loan investors, reducing the chances of costly buybacks.
Another Benefit: Increased Efficiency
Increased efficiency is another benefit. A few solutions feature a wide range of automated features, including rate and status alerts, which free loan officers from constantly monitoring pipelines so they can focus on more productive tasks. These technologies can also be used to create and customize your own rate sheets and produce side-by-side comparisons of rates and products, allowing loan officers and members to see how products stack up against each other as well as those of other lenders.
What's more, these platforms allow institutions to determine which loan officers and branches are producing the most loans, and how much money is being left on the table from untapped opportunities. Most solutions also provide electronic delivery of closing documents. And some provide personal websites for loan officers that enable the combination of personal, high-touch customer service backed by powerful, consumer-friendly pricing technology.
This technology can be integrated with a company's existing loan origination software, credit reporting tools, and other applications. There are even solutions allowing you to customize any part of your workflow in real time, without waiting forever just to edit your fee structure. These solutions aren't cumbersome or training-intensive, either-you can expect to have a system up and running in days.
But technological efficiency isn't the only benefit. There's also member service and fulfilling member expectations. Getting back to my point about homebuyers using the Internet to shop for mortgage rates-the combination of low mortgage rates, low home prices and a $8,000 tax credit currently provides a huge incentive to first-time homebuyers, many of whom have grown up with the Internet. These folks expect their financial institution to provide them with all the mortgage information they could find elsewhere, right at their fingertips.
We've reached the point where consumers expect to find just about everything they need instantaneously. The large banks' websites and all of the features they entail-like learning about the mortgage process, shopping for products and prices, locking rates, submitting mortgage applications, and receiving the loan of the borrower's choice-have raised the expectations of today's consumer. Regardless of the state of the market, as time marches on, more and more credit union members will start checking their institution's website for mortgage information, and the smart credit unions will give them the features they'll want to see.
Bruce Backer is the president of LoanSifter, Inc. For info:
