Some sophisticated middleware is helping one big Silicon Valley credit union handle a surge in mortgage business driven by falling mortgage rates and a flight to the perceived safety of credit unions.
Technology Credit Union in San Jose, Calif., is using solutions from Del Mar DataTrac to automate many of the manual processes in its lending operation, enabling it to handle a rising tide of refinancing and new mortgage applications.
“Since Thanksgiving, we've gone from about three applications a day to about 50. We had quite a backlog for a while but we're getting to it all now, and there's no question in my mind that if didn't have this software, we'd be looking at up to a three-months turnaround time on some of these,” said Steve Donahue, assistant vice president of loan origination at $1.3 billion, 78,000-member Tech CU (www.techcu.com).
DataTrac software serves as a single point of data input and management for mortgage applications, allowing access to underwriting, secondary markets, documents, funding, shipping, accounting, servicing and insurance.
Tech CU uses that in-house solution along with the San Diego-based company's WebTrac online, use anywhere interface. They integrate with the CU's Mortgagebot loan-entry and Calyx loan-processing systems, allowing underwriters, appraisers and all the other parties involved in approving, funding and closing a loan to move the process along efficiently.
“Everything that WebTrac and DataTrac does for us are things that in the past we have done by hand with spread sheets,” Donahue said. “That was a lot more cumbersome and a lot less efficient and there were a lot more problems.
“Now, we have kind of a central collections warehouse for all these documents that everyone with an interest in the process can access. A member, for instance, can call and we can quickly give them a real-time status on their loan application.”
The whole process has been put the test by the recent surge in activity, Donahue said, his credit union has seen in new mortgages and refinancing alike.
“We're doing better in the Silicon Valley than most of California overall, and the dramatic drop in interest rates at the end of the year had a lot of people coming to us to get out of their ARMs and interest-only products into a low, fixed rate,” said the Tech CU lending assistant vice president.
Rob Katz, president of Del Mar DataTrac (www.delmardb.com), said much of his company's client base of about 300 credit unions, community banks and mortgage bankers are reporting the same experience. “In our sales cycle we are particularly seeing more credit unions and community banks looking to expand their mortgage lending because of demand from their customers and members,” Katz said.
“I also think there's a fear factor,” he said. “In talking to lenders, credit unions, banks, we're hearing that people are afraid of going to Wells Fargo, Bank of America, Countrywide…these places that are in the news all the time. Credit unions aren't, and they're being seen as really a safe haven.”
Katz said he's also seeing a change among the vendors who serve his market. “The biggest change,” he said, “has been for vendors to work together. Just a couple years ago, things like pricing engines, what can I sell this for on the secondary market…all that was very independent. Now the vendors are working hard to make their systems talk to each other.
“Now you're seeing Mortgagebot, Calyx, DataTrac…companies like us playing nicely together in the sandbox. It's really because we want to work together better so lenders can get more value out of our system.”
Katz said that cross-vendor integration is showing up in such tangible ways as the continuing evolution of and adherence to Mortgage Industry Standard Measures Organization definitions and standards.
“We're standardizing the way technology vendors trade information. That goes all the way to such things as agreeing to what a definition of income means,” he said. “When the technology vendors agree on a definition, it makes integrating data between vendors and platforms easier than ever before.
“And that makes using Web services and traditional software more efficient, which benefits everyone.”
Donahue agreed. “The only thing that's slowing us down is not having enough bodies,” the Tech CU executive said. “The technology all works fine.”
–mrapport@cutimes.com

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Technology CU Uses DataTrac Software to Help Handle Mortgage App Surge

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