LAS VEGAS — The pitch from the podium to credit union mortgageexecutives last week was clear: you can do a lot better in trackingdown new loan growth and increasing membership despite a tough ratemarket.

“You can't wait for the business to walk in the door because itwon't happen,” exhorted Tracy Ashfield, a Madison, Wis. mortgageconsultant.

Whether it's coming up with new pricing or rate techniques,retraining staff or speeding up processing, CUs need to become moreaggressive on mortgages as a positive step to protect the memberbase, advised Ashfield, in remarks here before the annual meetingof the American Credit Union Mortgage Association.

“Now that's sad,” declared Ashfield as she took a hand count ofdelegates who expected a good mortgage year in 2007.

Ashfield, the executive vice president for strategic mortgagesolutions at Prime Alliance Solutions, Tukwila, Wash., told ACUMAconferees she understood their dilemma in coping with rising ratesand yet many CUs lack the drive or will power to explore ways toincrease the portfolio.

She maintained there are many avenues for CU mortgage execs tofollow “whether it be working closer with realtors or builders orgoing after first-time home buyers and those of modest means.”

On that score, ACUMA attendees heard a similar plea from MercyJimenez, a Fannie Mae senior vice president, urging CUs to draw ontheir vast, untapped mortgage opportunities in minorityhousing.

Jimenez, who heads up Fannie Mae's single family mortgagebusiness unit in the Washington-based National Business Center,called credit unions “the best kept secret in mortgage lending” andrepeating a message delivered last May, said CUs because of membertrust and loyalty “are uniquely positioned among all financialinstitutions to grab the brass ring.”

Unfortunately, they get bogged down in the rhetoric over “theimmigration debate” or get trapped in “housing bubble fears.” Theseare legitimate concerns facing CUs like other financialinstitutions, but CUs need to understand their great advantage inthe market as institutions with the highest amount of trust. In herremarks, Jimenez cited Forrester Research studies earlier this yearshowing members consider their CUs far above banks as trueadvocates for their welfare and their best interests. She said thatkind of support could be translated into new mortgage businessprovided CU leaders reach out to borrowers in positive ways. Thefacts are, she said, that two million homes are built each year andthat minorities will be responsible for 80% of the growth in newhome ownership over the next 15 years.

Over the next 15 years, immigration will add 18 million and 70%of all new households will be minorities. By 2020, 40% of thenation will be African American, Hispanic, Asian or some otherminority, she said.

Credit unions, she said, are well equipped to deal with what shecalled the “credit/underwriting gap” in which borrowers come upwith nonstandard employment records and have a lack of credithistory. Those minority borrowers, who may have had a badexperience in their home country with banks or other financialinstitutions, “will turn to credit unions” and CUs need to be readyto accept them, she said. CUs need to leverage the memberrelationship, Jimenez added, which translates to getting members tounderstand that because of their structure “they are not alwaysafter short-term gain or just closing a loan.” Moreover, CUs“typically don't sell off servicing” seeking to retain the memberrelationship. In her remarks, Ashfield also discussed the advantageof retaining the service function, but stressed that once a CU hasmade the decision to keep that business in-house, the mortgagestaff needs to push contacts with members on additionalservices.

Otherwise, “keeping it in house is useless,” she said, alsoadvocating CUs can save substantial sums by cutting down onneedless paper accumulation in the application and record-keepingprocess by resorting to CDs and tech-based systems. Ashfield saidCUs could work harder at reducing closing cycles from those thatextend 30-45 days down to 10-14 days. In her remarks, Ashfield saidshe found many large CUs far advanced in their mortgage operationswith more lackluster attitudes among small CUs. Citing its manyadvantages, she said CUs still seem discouraged by the smallshare–2%–that CUs now hold of the U.S. market, but that should notpreclude pursuing creative ways for increasing that percentage. Shetold the ACUMA gathering that in other visits with CU mortgageexecs she found “a little more optimism” than in the Las Vegasmeeting. “It just doesn't have to be a bad year,” if CUs pick upthe pace, Ashfield said. –[email protected]