FAIRBORN, Ohio-Wright-Patt CU has formed a partnership with a local real estate company with a goal of expansion as the relationship develops.
Wright-Patt CU and Irongate Inc. Realtors, based in Centerville, have combined to form Southern Ohio Mortgage. Tim Mislansky, who wears dual hats as SVP and chief lending officer for the credit union and president of its myCUmortgage CUSO, said the two parties have developed a joint marketing agreement that went into effect July 1.
Wright-Patt CU loan originators have been given space in several of Irongate's real estate offices, which allows them to work directly with buyers on the spot. As the partnership develops, Mislansky said the goal is to form a mortgage company that is jointly owned by WPCU and Irongate.
"Irongate is the Dayton area's largest Realtor," Mislansky said. "It handles approximately 30% of real estate purchases in the market, roughly 3,000 of 10,000 transactions. We figure if we can get 25% of those loans it would double our marketshare."
Mislansky said he met one of Irongate's owners about five years ago. At the time, he recalled, Irongate had a joint venture with Wells Fargo and WPCU was "not much of a mortgage lender," holding just 2% of the local purchase market.
"The Wright-Patt mortgage story is slow but steady growth," he said. "Over time we built our market share, and we have a strong brand in the Dayton market, so more and more people know us across several industries. I don't think the owner of Irongate would have called us three or four years ago, but we have built up from 2% of purchases mortgages to 10% in five years.
"We were helped by the demise of Countrywide and National City," he added.
Early in 2012 Irongate approached the $2.4-billion Wright-Patt and said things were no longer working out with Wells Fargo. Mislansky said WPCU puts a great deal of emphasis on working with local companies, making the partnership "a good fit."
Build Purchase Mortgage Business
The myCUmortgage CUSO works with approximately 150 CUs. Mislansky said he is concerned that credit unions are doing a "great job" of growing their refi business but are not getting enough purchase mortgages.
"I am of the belief that eventually these refinances will move away," he said. "As credit unions we need to be ready to go after the purchase market."
According to Mislansky, CUs need to be thinking now about how they are going to generate purchase loans when interest rates eventually go up. If credit unions are not preparing today for that eventuality, he warned, they will have difficulty with their mortgage business.
"The lender still is driven largely by the Realtor, so credit unions need to develop stronger Realtor relationships," he said.
In the Second Quarter 2012 WPCU closed 25 loans with Irongate agents, or about 8% of its overall mortgage business. In less than one month of the partnership with Irongate, which Mislansky said represents the program "getting off the ground," the CU has received 20 purchase loan applications.
"There is huge potential here," he declared. "We think we can double our market share on purchases."
