A credit union caught between a drastic decline in mortgage refinance demand and a slowly growing purchase launched an effort aimed at realtors.
The roughly $1 billion Eli Lilly Federal Credit Union saw its mortgage business slide significantly in 2013, dropping from $215 million in new loans in 2012 to just $125 million in 2013.
“Mortgage refinance just fell off a cliff for us last year,” said Rick Thornburg, senior vice president for lending at the Indianapolis credit union. He added the loss was not tapered or gradual, but rather precipitous, as interest rates began to rise or look like they were about to rise.
The good news in the numbers, Thornburg said, was that ELFCU took the opportunity to make the transition to more purchase money loans. The credit union tightened its guidelines and procedures to underwrite loans in a timelier manner, a factor that is particularly important when making purchase mortgages.
As a result, 70% of 2013's $125 million came in purchase money loans.
“The push we have launched now is meant to move us further along that path and help us make up that $90 million in lost loan volume,” Thornburg said.
The credit union hired six new loan originators with proven purchase lending track records to reach out to real estate professionals in the Indianapolis area. It also made sure that its entire loan origination, underwriting and closing staff are under one roof, further simplifying and streamlining the mortgage process.
“My office is just down the hall from the originators’ offices as well as the underwriters’,” Thornburg said. “Whenever they want to ask me a question or need something explained or moved along, they know just where to find me and can get me quickly.”
Thornburg explained that while the 84-year old credit union added multiple SEGs, most of its members remained either Eli Lily employees, former employees, retirees or their families. And since the company is headquartered in Indianapolis, a large number of members and potential members live in the Indianapolis area.