<p>SOUTHFIELD, Mich. -Sell the servicing for members' mortgages to a third-party provider? Not a chance, says Dave Toepp, president of Mortgage Center LC. It's not only something the CUSO wouldn't consider doing, "it's why members come to us in the first place," he says. It's that philosophy that has helped the 11-year old Mortgage Center LC reach the $500 million mark in servicing. "Servicing is the crust of the biscuit, that's why we're here," says Toepp. "We wouldn't exist otherwise." Founded in 1991 by six Michigan credit unions, two of which have since merged with each other, Mortgage Center LC also originates and services mortgages for an additional 45 credit unions. The average size mortgage the CUSO makes is $110,000, said Toepp. Last year, the CUSO did $256 million in first mortgages. In addition to the typical standard types of mortgage products for 10, 15, 20 and 30 year terms, Mortgage Center also offers innovative products such as the Michigan State Housing Authority product for first time homebuyers which offers below market interest rates and requires a lower downpayment. Would Mortgage Center LC ever consider selling the servicing rights for a mortgage to another party? "It's not something we've ever considered, and I don't understand how credit unions can do this," said Toepp. "We want to keep the mortgages and the servicing in the credit union family. It's the power of the cooperative effort." According to Mortgage Center's agreements with the participating CUs, members can apply for a loan either through the CU, which in turn refers applicants to the CUSO, or directly with Mortgage Center. When the loan is approved-the CUSO uses Fannie Mae underwriting standards to make its determination on applications-the member's CU has the opportunity to invest in the loan and keep it on their portfolio. If the CU decides not to take the loan, then Mortgage Center sells it on the secondary market to Fannie Mae. "But we keep the servicing," Toepp reiterated. "The servicing stops with the CUSO." Even if the CUSO has to turn a member down for a loan because of a credit or income obstacle, the CU still can decide to make an exception "for solid members." Toepp said the CUSO does run into situations, especially with first time homebuyers, where "there's a high percentage of folks who don't have an understanding of what's involved with applying for a mortgage or buying a home." The CUSO offers homeownership seminars at credit unions to familiarize the members with just what's involved. Sometimes, said Toepp, the member realizes they're just not ready to buy that home of their dreams. There are also times when Mortgage Center has to reject a member's application. "It's better to have the member walk away from buying the home they hoped to buy before they sign the contract, than after," said Toepp. Just because a member is turned down for a mortgage application, doesn't mean they're turned away from the CUSO. Mortgage Center continues to work with the member to improve their credit rating and reduce their debt. "They know we'll be here for them when they're ready to buy that home," said Toepps. [email protected]</p>

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