FAIRBORN, Ohio-One of the largest credit unions in central Ohio is radically changing its presence in the mortgage market.
Wright-Patt CU has purchased the origination firm Select Mortgage Group. The $1.6-billion credit union already runs a back-office processor subsidiary, myCUmortgage, that underwrites and sells credit union partners' mortgages on the secondary market, but the purchase of an origination firm will enable Wright-Patt to quickly expand its business model, according to SVP Tim Mislansky.
"We wanted to help credit unions that didn't want to originate loans, as well as provide a FHA option for credit unions that did not want to obtain their FHA/HUD approvals," Mislansky told Credit Union Journal. "In addition, we were interested in expanding our market presence. Select Mortgage has credit union clients in Indiana, Kentucky, Tennessee and West Virginia-all markets we are interested in expanding into."
Wright-Patt declined to disclose what it paid for the mortgage origination firm.
Mislanksy is hopeful that discussions with existing clients at both subsidiaries will lead to more credit unions choosing to utilize the other service as well. Operational changes at each subsidiary could be forthcoming in an effort to entice more CUs to use both services.
"This might include signing a myCUmortgage credit union to offer FHA and VA loans through Select Mortgage Group or having a Select credit union utilize the myCUmortgage secondary market options," Mislanksy explained. "Our message is focusing on that through our size and efficiencies, we can generally offer a better rate to their members, lower processing costs to members and the credit union, and also help the credit union earn more revenue from mortgage lending."
Nothing will change for Wright-Patt members, as they will continue to work with in-house originators when purchasing a new home or looking to refinance. But the credit union does believe its purchase of Select Mortgage Group will indirectly benefit the membership nonetheless.
"We will be able generate a new source of revenue from Select Mortgage Group, and that income will be passed back to WPCU," said Mislanksy. "This should allow for better loan and deposits rates and lower fees for the WPCU membership."
