MADISON, Wis.-Credit unions need to make even stronger efforts to ramp up mortgage loans, according to one analyst.
Ira Oskowsky, regional sales director for the Eastern Region for CMG Mortgage Insurance Company, stressed that the mortgage creates a "preferred financial institution" with the borrower.
"There is nothing like a mortgage-nothing close. Each mortgage loan brings an average of 3.5 additional products, plus cross-selling opportunities," Oskowsky said during CUNA Mutual Group's Online Discovery conference. "If they have a mortgage with their credit union, people will want to have a share draft account to make automatic payments. If someone's mortgage is not with a credit union, it will be with a bank and banks are very good at stealing away business from a credit union. Banks will get people to move over their CDs, issue credit cards for the entire family, and eventually transfer all balances."
There are several steps CUs can take to attract mortgage loans, he continued, beginning with a "smooth" application and approval process that has a quick turnaround. Members should be offered a variety of products, rates and payment plans.
Visibility is important. One easy talking point is to have a brick in every teller window. When members ask what the brick is, the teller can say it is the beginning of their new house.
"Mortgages can be scary to many people because the dollar amounts are high, there is uncertainty in the market and it is a 30-year commitment. Credit unions need to be prepared to do a lot of hand-holding for their members," he advised.
Realtor Relationships
To build business with Realtors, Oskowsky called for including identifying which of the CU's members are Realtors, Oskowsky said.
"Realtors will drive business. And if Realtors think a credit union is too difficult to work with they will go to a bank, so make it easy for Realtors to send business."
For those CUs that don't have the resources to offer mortgages, Oskowsky asserted they should work with one of the many CUSOs that will allow them to offer mortgages to their members. In addition, there are non-CU aggregators that perform the same task.
"Offer lower rates and fees," he said. "Beat the market because the mortgage will be profitable anyway as it brings in other products. If not in house there are so many strong CUSOs out there. Investigate working with others who have built up expertise. Do what you are willing to do, but please offer mortgages."
