A Credit Union Resolution for 2013: A Bigger Share of the Purchase Mortgage Market
By Mike Corn, CU Realty Services
Right now, there’s a good deal of momentum driving the growth of credit unions’ purchase mortgage business – low home prices, even lower interest rates, and savvy buyers looking for a good deal. Add in consumers’ lingering frustration with big banks and their desire for a new PFI, and it’s the perfect time to add member-centric real estate services to your mortgage program.
According to Callahan and Associates’ third-quarter TrendWatch, credit union mortgage originations increased 60 percent in January through September 2012, making it the largest driver of the year’s record-breaking origination growth. And a Dec. 13 New York Times article reported that credit unions are expected to reach their highest-ever mortgage loan originations – $100 billion-plus – in 2012!
The strength of the growing mortgage market brings credit unions great opportunities to build portfolios as they start the New Year.
The concept is simple: By repositioning themselves as the primary resource for members who want to buy or sell a home – instead of simply being a mortgage provider – credit unions can significantly increase their purchase mortgage market share. The secret is to become members’ First Point of Contact® – a role that traditionally falls to Realtors®, who tend to direct buyers to preferred lenders. If your credit union isn’t among these lenders, you’re likely to lose the business.
But you can change that by shifting how you think about and position your mortgage program. Consider adding new features and benefits for today’s home buyers by installing a real estate services program.
- Financial incentives
Attract member attention and interest with time- and money-saving opportunities, such as reduced Realtor commissions or savings on closing costs. With interest rates at record lows, favorable mortgage rates aren’t enough to set your credit union apart from competitors – but discounts can. Buying a home comes with many out-of-pocket expenses, and members will appreciate any savings you can offer them.
- Buyer/seller services
Make buying or selling easier by providing online tools such as home and neighborhood search sites, articles with tips on home maintenance, and mortgage calculators. Add home-buying seminars and workshops to your educational offerings, too. Whether your members are seasoned money managers or Gen Y and Millennials just starting out, everyone appreciates easy-to-find information on complex financial matters, like buying a home. Let your members know your credit union provides this help. Not only will you help to strengthen their financial wellbeing, but you also will increase the likelihood of being their First Point of Contact.
- Agent network
The majority of real estate purchases today go through an agent – 89 percent according to 2012 National Association of Realtors® survey. You can enhance your mortgage success – and provide members a key benefit – by building strong relationships with local agents. Create a network of qualified, experienced Realtors whom you trust to serve your members. Help these agents understand how credit unions function, including their member-centric philosophy. And make sure these relationships provide opportunities for you and participating agents to grow your respective businesses.
Positioning your credit union as members’ primary resource for buying or selling a home can significantly increase your purchase mortgage market share. The white paper, “A Credit Union’s Guide to Increasing Purchase Mortgage Share Through Real Estate Services,” can help you get started.
It’s a new year, and opportunities abound to grow your credit union’s mortgage business. With three key steps – providing financial incentives, enhancing buyer and seller services, and building an agent network – credit unions as a whole can make 2013 another year for the record books.
