A credit union caught between a drastic decline in demand for mortgage refinance and an only slowly growing purchase money business has launched an effort aimed at real estate agents to recover its position.

The 50,000-member, $1 billion Eli Lilly Federal Credit Union saw its mortgage business slide significantly in 2013, moving from $215 million in new housing finance loans in 2012 to $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 said the loss was neither tapered nor 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 begin the transition to making more purchase money loans, tightening its guidelines, and implementing procedures to underwrite loans in a more timely manner, a factor which is particularly important when making loans that finance property purchases.

The result was that that 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 has hired six new loan originators with proven track records in making purchase money loans to help it reach out to real estate professionals in the Indianapolis area. It has 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 ELFCU had been very specific in the sort of professionals it wanted.

“The credit union has a very good profile in the community so, frankly, we were a little bit overwhelmed at the response to our ad [for new originators], Thornburg explained. “But the numbers were a good thing because they allowed us to be pretty choosy in our selections,” Thornburg said, adding that if a candidate in the meeting made comments about looking forward to how many big deals they could do and how much money they could make, ELFCU generally didn't keep going with that person.

The result had been originators which were experienced in the mortgage field but new to credit unions and who needed to be brought up to speed.

Topics included the role of profit in the program as well as expectations about their attitude toward members and what a field of membership meant to their work, he explained, adding that the new staff had been enthusiastic about what they learned.

“You need to understand that mortgage bankers are generally not thought of that well after all that happened [in the crisis], and it can be a pretty brutal business other places,” Thornburg said. “So there were a couple of the new people who had been very successful in the business, but had been taking time over the Christmas break to consider whether they wanted to keep going in it.

“Now those folks are loving working for us and think they have died and gone to heaven, that's what coming here has meant to them.”

Hiring originators who are already known in the real estate community and who know real estate agents is an efficient way of introducing ELFCU to groups of professionals who have never used the credit union, Thornburg explained.

“We believe we are very well positioned for the local market in 2014,” Thornburg said.

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