Is a full-service real estateCUSO the next logical decision for credit unions? Let's examine ifthis makes sense. Most credit unions have taken the memberrefinance boom as far as they could and now that the playing fieldhas become more challenging they need to be looking for somethingto close the mortgage loop.

What makes more sense than to create or join a full-service realestate CUSO and serve the captive audience every credit unionalready has…their membership?

Can we make sense of this concept and determine what a handfulof forward thinking credit unions already know? If you offeredfirst mortgages to your members over the past seven or eight yearsyou certainly learned and enjoyed the significant financial andmember service benefits these loans provide. Given the vastmajority of those mortgages were refinances you are now faced withthe same challenge every other mortgage lender in the United Statesfaces … how to originate your share of the smaller purchase moneymortgage market?

Credit unions initially wanted to have a first mortgage and ahome equity loan of some kind in place and recorded against theirmember's primary residence. Unfortunately credit unions didnot have to work too hard to generate those refinance mortgages androde the wave of activity for as long as they could. Todayrefinances are no longer as plentiful as they once were and firstmortgage volume and the accompanying income dropped significantlyat most credit unions.

Because purchase money mortgages are traditionallyRealtor-driven, they are small portion of a credit union's firstmortgage business. So what is the credit union to do to garner itsshare of member purchase money business? If you have not alreadynurtured or begun to nurture relationships with Realtors servingyour marketplace you may believe it is too difficult or even toolate for your credit union to be a player in the purchase moneymarket.

Even if you decided to try to develop the Realtor market, doesyour 2014 strategic plan devote the financial and human resourcesnecessary to introduce and sustain an ongoing effort to build andfoster stronger relationships with the Realtors? Realisticallyspeaking your credit union is probably new to the Realtor marketand may not really understand Realtor relationships are notdeveloped very quickly, and unless your plan allows for aprotracted effort over time to build these relationships and theaccompanying purchase money business, you will not make plan.

This does not by itself mean you do not have the Realtors as ameans to keep your credit union in the purchase money mortgagemarket and help you regain the strong presence in the firstmortgage market place you enjoyed during the refinance boom. But itmay not prove to be successful quickly enough to satisfy yourcredit union's needs and expectations.

The refinance boom over the past few years saw credit unionsbecome very capable first mortgage lenders. Unfortunately like alllenders, credit unions face significantly reduced refinancemortgage volume. This makes a full-service real estate CUSO alogical evolution of the credit union involvement in real estatesecured lending.

Next Page: Purchase MoneyEvolution

Let's look at the evolution of a purchasemoney first mortgage. It begins with financing a primary residenceand if necessary or financially prudent the refinance of that loan.Credit unions understand refinancing first mortgages but havelittle experience in originating purchase money mortgages where thecycle typically begins with a Realtor's involvement in the mortgageselection process.

Unless your credit union has a vibrant, well-publicizedpre-approval program designed to capture your member's attention atthe point of decision (when they are thinking about buying a home)you will usually miss the opportunity to get their mortgagebusiness at point of sale. A few forward-thinking credit unions sawa viable and attainable solution to the purchase money challengewas to either start a full service real estate operation withintheir credit union or became part of a full-service real estateCUSO.

Creating a real estate operation within your credit union may betoo costly and might even be counter productive at this point intime. However, using the services or becoming a member of afull-service real estate CUSO may not be. They have a captiveaudience in their membership and have spent years earning theirtrust by servicing them as they provided an ever-expanding varietyof financial services. So why not leverage that earned trust bybeing able to satisfy your member's real estate needs and offer allof the real estate transaction's services – listing, buying andfinancing within the walls of your credit union?

This is not meant to over-simplify the effort necessary tocreate a full-service real estate CUSO but from a business andservice perspective consider the benefits to your credit union andmembers. You provide space in your credit union for your members toconduct business in familiar surroundings with Realtors that workfor a credit union-owned company. The driving force behind thistype of member- centric relationship is service and by being ableto provide expert advice, competitive products and the personalattention members are accustomed to receiving, the income willfollow.

One word of caution, even though some individuals may havepurchased and sold a few properties and believe running asuccessful real estate CUSO is not rocket science, it should beleft to the real estate professionals. Remember, by allowing accessto your membership and financing products you are entrusting yourmember relationship, which you have spent years developing, tosomeone that is not a credit union employee.

So make sure everyone involved in this venture has the same setof values and is dedicated to service. When you perform your duediligence everyone involved in the CUSO should not only have thenecessary credentials but also ensure they have a good reputationin the Realtor community.

On the bright side, any successful Realtor is very adept atfarming for prospects and when she or he understands the tremendousopportunities presented by being an agent of full-service realestate CUSO; it should not be too difficult to get licensedRealtors interested in becoming a member of the CUSO staff.

Is there a better way to help your credit union and members thanto be able to provide all the services when they are about to make,in most cases, the most expensive real estate decisions they face:selling, buying and financing a home?

Cos Manzo ispresident of Cos ManzoConsultants in Levittown, Pa.