LoanCare Teams Up with a Credit Union Mortgage Provider

Aimbridge Home Loans, a provider of mortgage outsourcing to the credit union industry, has formed a relationship with LoanCare Servicing Center to offer a private label loan servicing option to credit unions.

LoanCare is a national loan subservicer that currently serves more than 100 companies with approximately $5 billion of loan balances under management.

The affiliation means that credit unions can transfer their current loan servicing portfolios to Aimbridge Home Loans/LoanCare who, on a contract basis, will perform servicing functions such as payment processing, investor reporting, escrow administration, mortgage insurance administration and default management.

Keith Brown, president of Aimbridge Home Loans, said the dual subservicing program between Aimbridge and LoanCare offers credit unions lower servicing costs and reduced operational risk.

He said that LoanCare's servicing platform has critical mass and can pass on cost benefits that come with economies of scale to both the credit union and its members.

He noted that Aimbridge has been referring servicing business from credit unions to LoanCare, based in Virginia, for a couple of years, so the two firms have experience working together informally.

Now that the relationship has been formalized, Aimbridge is able to bring the benefits of aggregation to its credit union clients that are seeking help from a subservicer, he said. Those benefits include the waiver of monthly minimum fees and other enhancements that individual credit unions might not be able to win on their own.

LoanCare benefits because Aimbridge essentially markets its services to the credit union clients.

"We are kind of like the people on the ground who are able to attract and deliver the sales component for LoanCare," Mr. Brown said.

He said Aimbridge has been impressed by LoanCare's commitment to the subservicing business.

"They are a subservicer that does nothing but subservicing. That's their focus and they do it very well," Mr. Brown said.

Additionally, Aimbridge and LoanCare will use the credit union's name and logo on monthly billing statements, year-end reporting and other borrower communications, so the consumer is unaware that some other party is actually performing servicing functions. Borrowers will be able to continue making their checks payable to their credit union, and payments can be made in the credit union's branch offices.

Aimbridge hopes the subservicing option will also help credit unions improve member retention, brand recognition and cross-sales. The offering also is designed to allow credit unions to expand their mortgage servicing business without expanding infrastructure.

Mr. Brown said Aimbridge provides a variety of different loan origination and processing programs and products to help credit unions participate in the home loan business. Those offerings include private label websites for home loans and a point-of-sale automated underwriting engine.

He said the key loan servicing concern for credit unions is maintaining their relationship with the member. Many credit unions are eager to extend their involvement in the mortgage industry so that a different mortgage provider does not have the opportunity to steal that members business, he said.

"Whenever a credit union is not able to offer a mortgage or has to sell a loan or transfer it somewhere else, that relationship gets transferred," Mr. Brown noted.

Another concern for credit unions is compliance. In addition to creating efficiencies, subservicing provides an opportunity for the credit union to put loan administration into the hands of a company that has expertise in legal issues and operational capacity to manage the compliance process, he said.

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