A credit union that seeks to grow its mortgage lending programwill almost certainly need to reach out to real estateprofessionals, according to a credit union that has built up strongrelationships with Realtors.

Headquartered in San Jose, Calif., the $1.3 billion MeriwestCredit Union has a portfolio of first-mortgage loans of about $486million, according to NCUA data as of the end of June 2009. Thecredit union had decided to begin growing its mortgage portfolio byunderwriting new-purchase loans when it realized it would need todo so in order to keep offering mortgages at all, according toAnita Domondon, vice president of loan administration for thecredit union.

“We started offering purchase loans in order to survive as amortgage lender,” Domondon explained. “When we realized we wouldnot be able to keep our program going only on refinancing ourmembers' existing mortgages.”

This is a big step for many credit unions because it meanstaking a part of the credit union, which is largely focusedinwardly and only refinancing the loans of its members, and seekingmortgage business from buyers in the broader community and the realestate professionals who serve them.

“I think new-purchase loans are a much bigger deal for creditunions because there are other parties involved and that many moreways the loan process can go wrong,” explained Meriwest CommunityRelations Manager Greg Meyer. “But credit unions should beencouraged because they can do this work and are often verywell-positioned to succeed at it, especially now.”

A key part of starting to offer mortgages for newly purchasedproperties is reaching out to Realtors in the area and buildingrelationships with them so that they feel comfortable recommendingthe credit union as a mortgage lender, Domondon and Meyerexplained.

Some of the effort to build relationships with Realtors issimply outreach, they said. For example, joining local associationsof Realtors and attending their events and letting them know thecredit union is interested in underwriting new-home loans. But theharder and ultimately more successful outreach is for the creditunion to get professional with its mortgage operation and startshowing that to the Realtors.

Especially in the current market, that will mean focusing onsolid, efficient and professional underwriting and getting themortgage lending process right, they said.

“Now more than ever,” Meyer said, “underwriting is king, and Iwould urge any credit union interested in building its mortgagebusiness to bring in some seasoned underwriters who know the marketto help do it,” Meyer said. Domondon added that it was important tolet Realtors see that the credit union wants to work with them tomake sales happen.

“You know, there was a time when if a credit union offeredmortgage services, it was between 8 and 4 weekdays,” she said. “ButRealtors don't just work those hours. Realtors make deals at 10o'clock at night on a Saturday sometimes,” she said. Further, thatavailability should be accompanied by a willingness to pay closeattention to the details of the mortgage process that couldotherwise derail the loan application if they are not noted andcorrected.

This can seem daunting to a credit union, but Domondon addedthat credit unions are well-suited to this sort of mortgage work onaccount of their attention to member service. She recounted howMeriwest asks one of its loan professionals to attend the closingof each of its loans, both to explain anything that the memberborrowers need to know and to demonstrate the credit union'swillingness to see the loan through to closing.

“So many of our new Realtor contacts have come from Realtorreferrals,” Domondon said. “They see us doing that and the otherthings we do to help our members through the process and they likethat. Not only will they recommend us to buyers again, they willtell other Realtors about us.”

Meyer said the current market that has been abandoned by manyother mortgage lenders provides a large opportunity for creditunions to expand their mortgage business, help existing membersinto new or bigger homes and raise their profile in the community.Being a family's first-mortgage lender, when maybe others were notavailable, is a strong way to start what could be a long andproductive relationship with a new member, he said.

ACUMA, the American Credit Union Mortgage Association, has madereaching out to realtors one of the key aspects of its program tohelp credit unions build stronger mortgage programs.

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