How will your credit union mortgage loan program grow in 2016?


First mortgages currently make up the largest segment of credit union loan portfolios, and have experienced consistent growth over the last three years. This growth has been spurred by low interest rates and exceptional refinance loan volume.

However, the Mortgage Banker’s Association (MBA) paints a very different picture for refinancing in 2016. The MBA forecast calls for a 35% decline in refi transactions due to the expected increase in 10-year Treasury yields. As a result, credit unions can expect less income from loan sales and lost origination fees.

To offset this loss, credit unions need to tap into the MBA’s expected 11% increase in purchase volume for 2016. This means added pressure on two fronts: bringing in more first-time mortgage borrowers to offset declines in refinancing volume and handling the existing momentum in originations cost-effectively.

Cultivating relationships with realtors and builders

As more first-time borrowers enter the mortgage market, it’s important for credit unions to form strong relationships with the builders and realtors who work on the front lines with would-be homeowners. Take advantage of and participate in local associations, educational seminars and other outreach initiatives. Cultivating these front-line contacts can help credit unions continue to secure the larger piece of the market that other lenders are competing for.

Partnering for efficiency and cost-effectiveness

The complexity of producing mortgage loans has been growing right along with credit unions’ share of the first mortgage origination loans. Staffs must have efficient, cost-effective tools at their disposal to handle the countless regulatory details, deadlines and double-checking now involved. Older-generation Loan Origination System (LOS) systems simply may not have what it takes to produce sound, saleable mortgage transactions today. But is it feasible to invest in new technology? Or add more resources to handle fluctuating loan volumes?

Many credit unions have made the decision to partner with a trusted mortgage service provider who can help them cost-effectively navigate the ebb and flow of loan origination volumes. This option allows credit unions to outsource as much or as little of the mortgage operation as desired, at a fixed price. And, the right mortgage service partner brings complimentary technology, highly efficient processes and personalized service to the table. This approach minimizes risk and variable costs while ensuring excellent service to borrowers and credit union resources.

We’re standing by to be that trusted resource for your credit union. Contact QR Lending to learn how we can help your credit unions run a profitable mortgage operation and grow your share of the mortgage market.

Paul O'Connor

Paul O'Connor

Paul O’Connor has more than 20 years of experience in the mortgage and finance field, ranging from loan origination, underwriting, fraud investigation, and relationship management. Prior to joining QR ... Web: Details