Credit unions have been seen as niche players in the mortgage market because they supposedly lack the size to compete against banks, mortgage banks and even mortgage brokers.
Yet, as the results for the 2013 Origination News top 200 survey shows, loan officers at a number of credit unions are able to hold their own in this business. One of them is Stephanie Dombrowski of Ent Federal Credit Union in Colorado Springs, Colo. She ranks 69th overall and fifth among the CU LOs, with $76 million in volume last year.
There are nine LOs associated with credit unions in the top 100 positions on the survey.
Dombrowski says she takes advantage of the community-based financial institution reputation credit unions have but at the same time offers customers the advantages of dealing with a larger bank or thrift that does portfolio loans.
"We originate, process, underwrite, fund and service all of our loans locally at Ent. This has been a huge benefit in the way we can make decisions promptly and close when our buyers would like to close," Dombrowski says. "To have the backing of the largest credit union in our area has definitely contributed to my success."
She started at Ent in 1999 in a management position in the credit union's consumer lending unit, which offers, among other products, home equity loans. As the home lending boom started to heat up in 2005 and the mortgage lending unit expanded, she moved over to that side of the credit union.
"The transition has been fantastic, as I found I was much happier helping members with one of the most important financial decisions of their life," she declares.
Dombrowski originates a full product set: conventional mortgages, Department of Veterans Administration-guaranteed loans and Federal Housing Administration-insured loans plus local down payment assistance program loans through the Colorado Housing and Finance Authority as well as Turnkey, an affordable housing program from El Paso County.
Land loans and construction loans are also part of the credit union's offerings.
Last year, nearly 13% of its mortgage loan business was from VA loans, while over 16% was from its first-time home buyer program.
Besides Dombrowski, Ent had three other originators on the 2013 top 200 list: Lisa Holbrook, ranked No. 90, with volume of $69 million; Thomas Bechtel at No. 127 with volume of $58 million; and Gina Marill at No. 198 with volume of $47 million.
Most credit unions were chartered to serve a common group, such as members of a union or employees of a company. That limits the number of people those credit unions can provide mortgage loans to.
Ent has an open charter, which essentially means anyone can join, and thus it covers the entire community. This means it is able to compete against the other lenders in its various markets in the state for business.
So to attract business, Dombrowski has to work the same referral partner relationships as others in her market.
But Ent has a strong reputation in its home market, as it has been voted best mortgage company and best bank for 2013 by the readers of a local newspaper, the Gazette.
There are four military bases in the Colorado Springs area. She has done first-time homebuyer seminars not just for real estate agents and their customers but on those bases as well.
Those bases, plus a large number of retired military people in the area, mean that the VA loan product plays an important role in what she is able to do for her customers. However, VA mortgages make up a small percentage of her volume.
The biggest source of business for Dombrowski is from real estate agent referrals.
"I have worked with many realtors for close to 10 years and have built personal relationships with them while maintaining a 'no-drama' business relationship," she says. "I communicate with my Realtor base throughout the process of the contract and am very upfront and timely in my communication with them. There is a level of trust there."
The Colorado Springs market "is relatively stable. We didn't have the extreme drop in prices during the great recession or an extreme recovery either," Dombrowski says. "Home values have increased slowly under $300,000 and little if any above $300,000. Our mortgage market is primarily conforming loan amounts given the median sales price of home in the low $200,000s."
This year, she says, the purchase market in the area is very strong.
"I'm working with people that may have been sitting on the fence the past few years, jumping off and getting back into the market," Dombrowski says. "I've also noticed that a lot of our buyers who may have been slightly underwater in their mortgages in the past are now in a position where they can sell their home and have the opportunity to upgrade."
Other sources of referrals for her include certified public accountants and financial services professionals.
Because Ent services its own loans, customers get monthly statements, which helps as a marketing tool for other products from the credit union and for refinancings. There is an ongoing series of communications with those past clients.
Ent also has regular communications with the real estate agent community, looking to be a resource for them. A manager for the credit union writes a regular column for the local homes-for-sale publication.
Under a recently rolled-out program called Ent Extras, the borrower is sent $75 gift card for Home Depot right after closing.
Besides the first mortgage products, the credit union is willing to do second home financing. Breckenridge, a ski resort area is only a couple of hours away, Dombrowski says.
Like in many areas across the country, one of the biggest challenges facing the real estate market in Colorado Springs is a lack of homes being place on the market for resale.
There is a very limited supply of homes in the $100,000 to $200,000 price range, which is where most first-time homebuyers can afford. "When they do go on the market, they go quickly. While I don’t expect to exceed $75 million this year, based on current numbers I do look forward to another great year with 75% of my business coming from purchase loans," Dombrowski says.