Getting to 8% of the U.S. mortgage market has been a long time in the making–a virtual overnight success after almost four decades of hard work by tens of thousands of truly special credit union staffers.
And like many others, I imagine the obvious reply is we will blow though 10% and upward. But while we bask in that outcome, we need to be careful. Like so many of the pro sports teams so many of us follow, we need to reflect on the phrase “grasping defeat out of the jaws of victory.”
We have to really assess where we are and where we want to be. I believe it’s no coincidence that credit unions reaching 8% market share and crossing the $1 trillion asset level happened simultaneously. Our competitors have long known the benefit of cross selling the same kind of portfolio of financial service products that most all of us our leading credit union mortgage lenders offer. Now is when this model will be tested.
Frankly, my personal experience and those of the many friends I have made over the years, tell me there is a lot of work to be done. We are not close to a competitive level as far as cross selling goes. We make loans, the operations folks handle consumer loans and checking accounts and the investment and retirement departments deal with their clients. We search far and wide to find credit unions leaders who successfully blend all of these products and services to produce the real profitability we will need going forward. We still have a large perception gap. In a previous interview, I mentioned a New England-based credit union and its ad campaign that paraphrased “we’re not the best kept secret anymore.”
Each year, we have a global Olympics. I want for an ad urging U.S. consumers to discover credit unions. I tweeted recently how General Motors spent more than $4 billion in advertising in 2011.
I think most people in the country know who General Motors is and yet they believe the need to spend billions reminding them.
The other issue is human resources, both in terms of knowledge and the pure number of staff deployed in mortgage lending if we believe housing finance is the key strategy for the future. Many of the credit union people I work with are expected to produce twice their work volume with little or no additional resources.
Using technology effectively is a great strategy. But if we are known for our great customer service, someone needs to answer the phone and engage in conversation once in a while. It is a differentiation we enjoy, but as someone who calls credit unions often, my fingers are well callused as well as my patience sometimes pushing all those phone keys hopefully to speak with someone.
Some competitors may actually be focused on this area alone. How many of you have seen a TV ad for Quicken Loans. One commercial featured the loan officer with her mobile phone stating “call me 24/7, that’s what I am here for.” I am sure we are not that competitive and welcome all challenges to that statement.
Sure, interest rates are low but like the sun, tomorrow, they will rise again. After the last refi has cleared and there are no new government stimulus programs urging consumers to modify their current loans, we will be back to the good old days of people buying and selling homes. We will also need competitive home financing in the manner many of us fondly remember from days gone by.
I realize we have just exited the worst recession since the Great Depression. However, it seems to be over so now is the time to work seriously on the future. What will the housing market look like when it rebounds? Who will be buying homes and who will be selling or downsizing? What will the Gen X, Gen Y and Millennial generations do as far as housing, own or rent? If I have any of those answers, I would write a book, but I will leave that to all of you.
Robert Dorsa is president of the American Credit Union Mortgage Association.
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