LAS VEGAS — The pitch from the podium to credit union mortgage executives last week was clear: you can do a lot better in tracking down new loan growth and increasing membership despite a tough rate market.

“You can't wait for the business to walk in the door because it won't happen,” exhorted Tracy Ashfield, a Madison, Wis. mortgage consultant.

Whether it's coming up with new pricing or rate techniques, retraining staff or speeding up processing, CUs need to become more aggressive on mortgages as a positive step to protect the member base, advised Ashfield, in remarks here before the annual meeting of the American Credit Union Mortgage Association.

“Now that's sad,” declared Ashfield as she took a hand count of delegates who expected a good mortgage year in 2007.

Ashfield, the executive vice president for strategic mortgage solutions at Prime Alliance Solutions, Tukwila, Wash., told ACUMA conferees she understood their dilemma in coping with rising rates and yet many CUs lack the drive or will power to explore ways to increase the portfolio.

She maintained there are many avenues for CU mortgage execs to follow “whether it be working closer with realtors or builders or going after first-time home buyers and those of modest means.”

On that score, ACUMA attendees heard a similar plea from Mercy Jimenez, a Fannie Mae senior vice president, urging CUs to draw on their vast, untapped mortgage opportunities in minority housing.

Jimenez, who heads up Fannie Mae's single family mortgage business unit in the Washington-based National Business Center, called credit unions “the best kept secret in mortgage lending” and repeating a message delivered last May, said CUs because of member trust and loyalty “are uniquely positioned among all financial institutions to grab the brass ring.”

Unfortunately, they get bogged down in the rhetoric over “the immigration debate” or get trapped in “housing bubble fears.” These are legitimate concerns facing CUs like other financial institutions, but CUs need to understand their great advantage in the market as institutions with the highest amount of trust. In her remarks, Jimenez cited Forrester Research studies earlier this year showing members consider their CUs far above banks as true advocates for their welfare and their best interests. She said that kind of support could be translated into new mortgage business provided CU leaders reach out to borrowers in positive ways. The facts are, she said, that two million homes are built each year and that minorities will be responsible for 80% of the growth in new home ownership over the next 15 years.

Over the next 15 years, immigration will add 18 million and 70% of all new households will be minorities. By 2020, 40% of the nation will be African American, Hispanic, Asian or some other minority, she said.

Credit unions, she said, are well equipped to deal with what she called the “credit/underwriting gap” in which borrowers come up with nonstandard employment records and have a lack of credit history. Those minority borrowers, who may have had a bad experience in their home country with banks or other financial institutions, “will turn to credit unions” and CUs need to be ready to accept them, she said. CUs need to leverage the member relationship, Jimenez added, which translates to getting members to understand that because of their structure “they are not always after short-term gain or just closing a loan.” Moreover, CUs “typically don't sell off servicing” seeking to retain the member relationship. In her remarks, Ashfield also discussed the advantage of retaining the service function, but stressed that once a CU has made the decision to keep that business in-house, the mortgage staff needs to push contacts with members on additional services.

Otherwise, “keeping it in house is useless,” she said, also advocating CUs can save substantial sums by cutting down on needless paper accumulation in the application and record-keeping process by resorting to CDs and tech-based systems. Ashfield said CUs could work harder at reducing closing cycles from those that extend 30-45 days down to 10-14 days. In her remarks, Ashfield said she found many large CUs far advanced in their mortgage operations with more lackluster attitudes among small CUs. Citing its many advantages, she said CUs still seem discouraged by the small share–2%–that CUs now hold of the U.S. market, but that should not preclude pursuing creative ways for increasing that percentage. She told the ACUMA gathering that in other visits with CU mortgage execs she found “a little more optimism” than in the Las Vegas meeting. “It just doesn't have to be a bad year,” if CUs pick up the pace, Ashfield said. –jrubenscut@aol.com

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ACUMA Attendees Urged to Not Give Up on Mortgage Market

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