Good Partners, Turnaround Differentiate CU Mortgages

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If "foreclosuregate" brought any lesson to the world of credit unions, it is that the mortgage process must be more than a "throw it over the fence" proposition. Service is the name of the game and the key differentiator for a credit union as it competes with larger mortgage lenders.

Accordingly, credit unions using settlement service partners (title insurance companies, abstractors, escrow agents, closers, appraisers) owe it to their members to be sure that those partners are a strong reflection of their values.

While the market downturn of the past three years has had an impact on mortgage lenders of all sizes, it has also provided an opportunity for many credit unions to emphasize the difference between their level of service and that perceived of the larger, national firms.

This differentiation has allowed many credit unions to make advances in market share. And although few expect a dramatic return to the mortgage origination volume of 2003-2006, most believe, at some point, the volume will grow again. Even though no one knows exactly when this will be, that turn may present a simultaneous challenge and opportunity for credit unions: will their settlement service partners be ready for the shift?

Andrew Wilson, vice president of lending for San Antonio-based generations FCU, places special emphasis on turnaround time being critical, and reminded that, "If your partner can't handle an issue in a slow market such as this, it most certainly will not be able to when the market picks up again."

Fred Cushing, loan manager for Dallas-based Lone Star CU, added his own emphasis on customer service, observing, "In times of trouble, are they willing to help me and my members by going the extra mile?"

Technology and process are also strong indicators of the service your partners can provide. One piece of advice I would share is that, if you can, drop in on a potential or even existing partner. Listen in to customer/member service calls. Observe the workflow process. Is it a seemingly ad hoc approach, or is there a workable system in place? Is technology a key part of the process, or an extraneous or even uncomfortable fit? In procuring a mortgage loan, your member will most likely remember how courteously he/she was treated, how well his/her questions were answered, and how quickly the process took place. Process and efficiency are key ingredients to ensuring the member is happy.

What To Look For In Your Partners

Related to the point above, another thing to look for: many settlement services firms have been forced to cut staff and other expenses during the uncertainty of the past three years. Do they have a plan in place and/or the technology to allow them to handle a sudden influx of new orders, if called upon? Can they adapt to a sudden change of product mix, or new regulations? Are they aware of the potential chokepoints or regulatory obstacles they face, and you as well? Are their workflow processes and key personnel able to handle a surge while new employees are trained, so that members are not forced to wait or money is not left on the table? Now is the time to ask.

Most credit unions are projecting the market is going to change again. Flexibility will be key. As Lone Star CU's Cushing reminded, "We all have no choice in the matter. Either we adapt, or we're out. It's that simple."

Jim Hollerbach is the President and CEO of San Antonio-based Hollerbach & Associates, an independent title research and abstracting firm in business over 25 years. He can be reached at or 800-580-8485.

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