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WAUWATOSHA, Wis. – By all accounts 2004 was a good year for Central States Mortgage. Even as the refinance market continued to soften, the multiple-owned CUSO turned in a record year. But 2004 has been over for five months, and Central States Mortgage has its sights set now on leveraging its success by expanding into the Phoenix market this year. Central States Mortgage – one of six subsidiaries of CSMC Inc. and the fourth largest CUSO in the U.S. according to Callahan & Associates – originated more than 7,000 loans worth over $1 billion in 2004. Overall the company grew about $45 million in volume, an accomplishment which CEO Richard Jungen is especially proud of considering that industry wide mortgage volume was down 30%. Jungen attributes much of the CUSO’s success last year to new construction business and its relationships with the “hundreds” of realtors it has in eight states it does business in – .Ohio, Indiana, Illinois, Iowa, Missouri, Nebraska, Minnesota, and Wisconsin. In addition, the CUSO is licensed to do business in three other states – Kansas, Michigan and Kentucky. “Credit unions need to get over their trepidation about having relationships with realtors,” said Jungen. “A lot of realtors have relationships with other lenders besides credit unions, and the last thing you want to do is send your members to a realtor only to find out that realtor sent them to another lender. So of course you have to choose your realtor partners carefully. But considering that four out of every 10 loans are controlled by realtors, it’s critical for credit unions to have those relationships. Having relationships with realtors means you’re able to compete with other referral sources.” It isn’t just Central States Mortgage that had a great 2004. Jungen said Central States Mortgage has averaged 20% growth since it acquired HomeSale Realty, an independent full-service real estate brokerage, in March 2001. Last year Jungen said HomeSale increased Central States Mortgage’s property closing by 70% in just one year. He also reported that another subsidiary – CU Fleet – is now the largest independent leasing company in Wisconsin, the largest credit union-owned leasing company in the U.S., and the second largest independent seller of used cars in the state. It’s ranked in the top 2% of all dealers in Wisconsin. In 2004, a fourth subsidiary – Direct Mortgage Funding (DMF) – had approximately $217 million worth of business. CSMG also has two additional subsidiaries – Premier Title & Closing Services Inc. formed in 1994 to provide title search, examination and closing services for CSMG.In 2004, Premier Title and its four affiliated companies produced nearly 9,000 title orders and closed over 3,600 transactions. In addition, CSMG’s title division provided over 1,500 letter records and title commitments to CUs throughout southeastern Wisconsin. CSMG’s sixth subsidiary is Central States Insurance and Financial Services. Initiated in 1993, the subsidiary provides life insurance counseling to help clients assess their insurance needs after taking on a new mortgage. Though undoubtedly proud of Central States Mortgage’s success, Jungen prefers to shine the spotlight on the company’s chief operating officers – there is one in each of the subsidiaries. Jungen says “there’s not a lot of bureaucracy in the company. That’s the secret to our success, I’m not a micro manager. “That’s always been my work ethic. I’m not really good at details, I get a lot of enjoyment out of the big picture,” he adds. “Each of these chief operating officers is better at what they do than I would be. They all have tremendous expertise in their field and I trust their expertise.” Coming off such a good year, Jungen is revved up planning for Central States Mortgage’s expansion into the Phoenix market. Jungen said CSMG’s plans include acquiring an existing mortgage company no later than the third quarter 2005 and bringing it under the CSMG umbrella. “We’ve pretty much covered the lending part of consumers’ needs and plan to stay put in the product markets we have,” he said. “Our strategy now is to expand the geographic markets we’re in to reach a greater number of members.” -

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