The challenge with mortgage lending is to take a complex transaction and make it as simple as possible, which isn't an easy task, Skinner allowed, given the process and execution of all the steps that go into it. From Alaska USA's point of view, mortgage lending is really five different businesses in one, and expertise is required in every one if it is to be done well. The steps are:

Origination–Taking the application, matching the correct program to the borrower, providing the necessary documentation and disclosures, processing the file and coordinating the closing (what a mortgage company typically does).
Secondary Marketing–Establishing relationships with markets that acquire mortgage loans, and developing a sales process, which requires a whole different layer of expertise (getting the best prices, having the right software programs, hedging risk).
Operations–The underwriting, closing, post-closing and shipping processes.
Servicing–a specialized industry in itself; administration of the loan, processing escrow payments for insurance and taxes, making payments to investors, etc.
Portfolio Lending–Holding the long-term mortgage loan as a credit union asset. Essentially, becoming an investor with all the risks (interest rate risks, credit risks, etc.) that go with being an investor. A credit union has to pay attention to its asset and liability management plan in order to portfolio long-term mortgage loans without excessive risk.

There are rules and regulations that go with each one of these facets of the mortgage lending business, and they require expert personnel. "I think many CUs want to be in the mortgage business, but they look at all of that is involved and think, given all the other service demands they face, that their efforts and money are better spent doing other projects," said Skinner. "Alaska USA can provide them the efficiency, the size and scale that will enable them to offer mortgage loan service and still make money at the end of the day," he said.

Instant Insights /

Alaska USA Hooks Up with Freddie Mac, CUNA to Break Down Mortgage Barriers

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