The nation's fourth largest mortgage lender wants to forge lending relationships with credit unions.
Quicken Loans has launched Quicken Loans Mortgage Services to help community banks and credit unions that want to issue mortgages but lack the necessary expertise, time or resources.
"With increased rules determining who can originate mortgages, many banks and credit unions have found themselves with a desire to offer home loans, but [there is not a] large enough need to justify the cost of hiring mortgage consultants and underwriters," the company said when announcing the new service. "Quicken Loans Mortgage Services fills this need, while providing the high-level client service and technology-driven platform that has made Quicken Loans the nation's largest online lender."
"Quicken Loans Mortgage Services provides a very exciting opportunity for Quicken Loans, as well as for the thousands of small-to-midsize financial institutions who continually seek to improve their offerings to their clients," said Bill Emerson, CEO of Quicken Loans. "While there are a handful of other lenders who provide a similar service, none are able to offer the level of client service or mortgage technology platform that has made Quicken Loans the nation's largest online lender for the past six years."
Ten credit unions and 74 banks have signed on with the service as of the third week of May.
Jay Farner, president of Quicken Loans, said the Livonia, Mich.-based firm already has contacts with both credit unions and community banks from when the company was called Rock Financial. He said the company is familiar with how credit unions are structured and the sorts of things credit unions and their members are looking for in mortgage lending.
Rock Financial became Quicken Loans in 1999 after it was purchased by the Intuit software company, publisher of the popular Quicken personal accounting package. The company's founder and other investors bought the company back in 2002 and it has remained privately held ever since.
Quicken would like its relationship with credit unions to resemble the kinds of agent issuing relationships that card issuing banks have offered, Farner said. Credit unions would continue to work with their members to help them choose the mortgage loans that best suit their needs while Quicken would handle the back office details of the loan along with the funding and, likely controversially, the servicing.
Farner defended the company's retention the loan servicing by pointing out that it has a long history of servicing mortgage loans and has taken steps to allow mortgage borrowers to make their loan payments in as easy and seamless a way as possible, primarily through electronic means.
He also noted that Quicken, a privately held lending company which is not a bank, would not approach credit union members with any cross selling.
Quicken also touts its experience with online mortgage lending as making partnership more attractive for credit unions. Farner pointed out that Quicken has experience offering mortgage loans in all 50 states and has made much of the mortgage lending process, such as documents review and signing, available online.
Reaction to Quicken's announcement has been mostly muted. Few mortgage CUSOs contacted about the company had any comment, but John Reed, CEO of CUSO Mortgage of Halpern, Maine, put the news in the context of CUs' ample competition.
"There are many competitors to credit unions," Reed wrote in an email about the news, "but we have the expertise and top notch technology that can compete with anyone in the marketplace. Credit unions need to step to the plate and promote the credit union brand and all that is good for our members."
Tony Bruschi, senior vice president with Philadelphia-based Radian Guarantee, said the move is probably a smart one for Quicken. So many mortgage firms have imploded in the housing crisis that credit unions and community banks are the last firms standing in many places and Quicken is smart to reach out to them as a way of approaching their customers and members, Bruschi said.
Farner echoed some of Bruschi's comments. Even though its financial and corporate ties with Intuit have dissolved, Quicken, Farner said, still issues mortgages for many Intuit employees. Part of what attracted the firm to credit unions, Farner said, was that credit union members were the sort of people the company was used to serving.
"We recognized them as familiar clients," he said.