To keep members and continue to grow, credit unions must come up with solutions
The good news: Credit unions grabbed 8.4 percent of the mortgage lending market share at year-end 2014, a continuation of a robust CU lending trend that has been on the rise in recent years.
The bad news: Home ownership rates have backed off the historic highs at the start of the 21st century and now have fallen near record lows.
For credit unions, that means a recommitted effort across all asset sizes is needed to keep momentum moving in a positive direction.
That’s no small challenge. But it boils down, quite simply, to two main points for credit union leaders: Recognize the crucial role real estate lending plays in meeting your members’ needs and make sure your members enjoy a positive experience securing that loan from you.
Buying a home is usually the biggest investment an individual makes in a lifetime. Yet a significant percentage of credit unions don’t even have a mortgage solution for members. If they can’t get a loan from you, they will either go elsewhere (and take their other business) or fail to qualify in today’s more difficult, no nonsense regulatory environment.
It’s not enough anymore for credit unions to offer car loans and checking accounts. To keep business growing, and help more of your members achieve the American dream of home ownership, you need to offer a mortgage solution.
And don’t use asset size as an excuse. Even small CUs can form partnerships, using the services of a mortgage CUSO, for example. It might not be easy, but it can be done. And it must be done.
But it’s not good enough to simply offer a mortgage solution. It needs to be a positive, pleasant experience for the member. The process for applying for and obtaining the loan must be transparent, efficient and understandable.
It also needs to be recognizable—that is, the member should know (1) you offer mortgage loans (think marketing and cross-selling), (2) you are willing to work with them even in special circumstances and (3) you can give them an answer (Do they qualify or not?) quickly and understandably.
So whether your potential borrowers fall into an underserved category (one CUs historically have helped), reside within the growing millennial segment that has balked at home ownership (and seeks to establish a relationship with a financial institution who understand them) or comes to you with a special situation, you need to have a plan. Now.