Wright-Patt Credit Union Turbocharges CUSO With Mortgage Company Buy

Even though Wright-Patt Credit Union experienced a 200% jump in loan growth over the past year through its mortgage CUSO, the financial cooperative felt it could turbocharge its lending program even more.To make it happen, the $1.6 billion Wright-Patt recently acquired Select Mortgage Group Ltd., a Centerville, Ohio-based firm that specializes in a range of loan services, including Federal Housing Administration and Veteran Affairs loans and warehouse credit lines to credit unions and banks. Financial terms of the transaction were not disclosed.Since opening in 1996, SMG has closed more than $750 million in loan volume, with last year’s volume at $91 million and projections for this year to exceed $100 million, according to the company’s Web site. SMG has roughly 60 contracts in place with credit unions, said Tim Mislansky, senior vice president of Wright-Patt CU and president of Wright-Patt Financial Group. The company is licensed in Ohio, Kentucky, Indiana, Tennessee, Florida, Michigan and West Virginia. Its vast lending network was one of the main reasons that drew the credit union to SMG.“This is a way for us to expand our footprint,” Mislansky said. “The majority of credit unions we’ve dealt with have been based in Ohio.”Wright-Patt has built a formidable lending presence through myCUmortgage, a CUSO launched in 2001. It serves more than 500,000 members from 60 credit unions originating and processing $800 million in mortgages to date. From September 2008 to September 2009, the CUSO’s loan growth increased 200%, fed by lowered interest rates, refinances and demand from consumers looking for bank alternatives for their mortgage needs, said Mislansky, who is also president of myCUmortgage.The plan is to use SMG’s referral services to complement myCUmortgage’s origination and back-office processing channels. Mislansky said the deal will also help expand the CUSO’s entry into FHA lending, another area of expertise at SMG.It took about a year to seal the transaction with SMG after conducting a due diligence screening, Mislansky said. The Fairborn, Ohio-based credit union did not look at any other companies, choosing instead to hone in on homegrown SMG. Going with a local firm was important because Wright-Patt was able to hold many face-to-face meetings and get to know the company’s inner workings. Financially, it made more sense to go this route rather than build another mortgage entity from scratch, Mislansky explained.As for the timing of the acquisition given the still troubling number of foreclosures nationwide, credit unions continue to be a in a prime spot to offer an alternative.“People still need to buy homes. More and more people are looking at credit unions as a viable option with the demise of big lenders and the stigma with some of the national lenders,” Mislansky noted. “A significant number of brokers are also going out of business, so there’s a need for credit unions to fill.”Doug Fecher, president/CEO of Wright-Patt, echoed Mislansky saying building alliances can go a long way to creating a wider presence in the mortgage market. With credit unions increasing home loan market share to 5%, which is up from 2% from a few years ago, the industry has started to build its presence.“We believe we can be an engine to fuel the growth that is available to credit unions with the disappearing of major lenders, greater marketplace reliance on FHA lending, and increasing credit union market share,” Fecher said.–[email protected]