WOBURN, Mass. – Joe Zampitella has done what he set out to do when he founded Members Mortgage Company 10 years ago – create an independently-owned company to offer customized mortgage lending assistance to credit unions in New England. A decade later he's still the sole owner and he wouldn't have it any other way. Zampitella, president of Members Mortgage, has been in the mortgage business since 1985. Prior to founding the company he worked as executive vice president for CUMEX, a mortgage CUSO that was owned by the former Massachusetts CUNA Credit Union Association and 10 Massachusetts credit unions (the CUSO was sold to Chittenden Bank of Vermont in 1994). Zampitella left CUMEX in 1993 and a year later he formed Members Mortgage Company. Despite changes in the mortgage landscape since the company's been in business, its mission remains the same. Independence Has its Privileges “Being independently owned means I don't have a parent company with a predetermined function and direction telling me what mortgage service I should be performing for credit unions,” says Zampitella. “Instead I can go to any credit union and ask them what they need me to provide them. My purpose is determined by what credit unions tell me they need me to do for them concerning mortgage lending, and that can involve anything from originating loans, processing and closing them. I deliberately set up Members Mortgage to be able to function like that.” Members Mortgage, through its relationship with Fannie Mae, also sells mortgages on the secondary market for its client credit unions. How successful has Zampitella been in his objective? Members Mortgage currently provides primary mortgage financing to more than 180 credit unions throughout the New England area. So far this year it's facilitated more than $200 million in loans and was ranked by Banker and Tradesman, a Massachusetts-based trade magazine as being among the top 100 lenders in Massachusetts and Connecticut. Members Mortgage has 40 employees. Zampitella admits the loans the company originated in 2004 are about half what Members Mortgage did in 2003, and he attributes the decrease to the refinance market. “In 2004 we made a conscious decision to stop doing refis,” he explains. “We work for credit unions that depend on having loan income on their books, and by just doing refis we told ourselves we were actually hurting these credit unions. We wanted to be focused in 2004 on purchase loans because that represents real growth and new business for credit unions, not merely rewriting their loan portfolio by doing refis.” As part of that strategic decision, Members Mortgage told its credit union clients it would only charge a flat fee of $995 for any refi loan in 2004, regardless if the loan was for an existing credit union member or new business. “By doing this we sent credit unions a clear message that we're on their side working for them and what's in their best interest,” says Zampitella. Members Mortgage Company is the only credit union mortgage company that's a redistributor of the Prime Alliance Solution. The company purchased the technology from Prime Alliance two years ago to use as its online loan origination system under the name MortgageClickT to small CUs that Zampitella says typically do about 10 to 15 mortgage applications a month. He explains that “Prime Alliance because of their price structure and the upfront investment credit unions need to make to run the program as well as the cost of maintaining the system, makes it most suitable for the largest credit unions in the country. But because of how we price MortgageClick we're able to provide it to smaller credit unions.” Earlier this year, Zampitella decided to spin MortgageClick off as a subsidiary of Members Mortgage. Since the company is licensed to only do business in New England, operating MortgageClick as a subsidiary allows Members Mortgage to market the Prime Alliance technology to credit unions anywhere in the U.S. In one of the most recent product enhancements, last month Members Mortgage announced that the MortgageClick platform is now able to support credit unions that offer a 40-year mortgage option. Zampitella says he's deliberately focused his business exclusively on working with credit unions in the New England area, and he says he hasn't been approached by credit unions outside the region. However several New England-based credit unions with members outside the area have asked him to consider expanding to other areas of the country. He says he hasn't made any decision on that issue yet, noting that “I'm not Joe fly by the seat of his pants.” Zampitella's also been approached by people outside the credit union industry who are interested in purchasing Members Mortgage. “They want access to the business flowing through the company,” he says emphasizing “that's not on my radar screen at all. There are banking and mortgage banking companies that would like access to my customer base, but I have no intention to sell to them.” Looking back over his 10 years in business, there are a few things that have surprised Zampitella about mortgage lending and credit unions' involvement. He's particularly surprised credit unions are willing to talk with people “peddling” subprime loans and at how many credit unions have approached him to do subprime loans. Stressing that he has absolutely no interest in getting involved with subprime lending, Zampitella says “credit unions were started to protect the working class guy, so I don't see how credit unions should be making these loans. We don't want to be acting as brokers for subprime lenders, that's inconsistent with the credit union philosophy.” That doesn't mean Zampitella doesn't accede Members Mortgage won't evolve over the next 10 years, in fact it's pretty likely. Looking ahead, he predicts more credit unions will be able to sell directly on the secondary market to Fannie Mae or Freddie Mac, it will be able for CUs to lock in on rates on a loan-by-loan basis, and it will be easier for them to service loans. Ten years from now he expects 50% of Members Mortgage's business to come from implementing mortgage loans and the remaining 50% to be derived from technology. “We intend to continue to work with small credit unions and help them support and leverage mortgage technology better,” says Zampitella. -

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