ABA Takes Issue with CUs Offering Total Mortgage Solution

WASHINGTON – An increasing number of credit unions and CUSOs are offering real estate brokerage services and title insurance, and the American Bankers Association says banks should be able to do the same to remain competitive. In a recent column on its Web site entitled "Real Estate Realities," the ABA's Senior Economist Keith Leggett wrote, "The empire builders within the credit unions are building an end-to-end mortgage solution model to increase their customer wallet share. Their credit unions want to control the whole real estate transaction process, not just the origination of the mortgage loan." According to the bankers' association, an increasing number of credit unions are beginning to offer real estate brokerage services and title insurance. "By offering these services, especially real estate brokerage, this increases the number of touch points for credit unions and makes it less likely that bankers will ever see the customer come through their doors for mortgage loans," Leggett wrote. The ABA cited as examples of credit unions and CUSOs involved in real estate brokerage services several mentioned in Credit Union Times' articles. Among them were Jeff Kline, president, Community America CUSO One who in an article that ran in the Feb. 1 issue entitled "TruHome Solutions Adding Title and Realty Companies to its CU Mortgage Mix," made the point that credit union partnerships with realtors on the mortgage side are just as important as they are with auto dealerships in indirect lending. The ABA quoted Kline as saying, "By being in the realty business, it helps credit unions get the loan." It also cited WESTconsin Credit Union, Menomonie, Wis., which Leggett said advertises that its real estate brokerage services and mortgage services go together like peanut butter and jelly. Also on the ABA's list of examples was BECU and its "one-stop, start-to-finish, home buying-and-selling approach" through its wholly-owned CUSO BECU Real Estate Services; and CU Realty of Va., Md., D.C. LLC, a multiple-owned CUSO that provides rebates up to 1% on the sales price if the member buys or sells a home through a CU Realty-approved agent. The ABA cited a statement made by CU Realty President Colleen Daly in an article in the Feb. 1 issue of Credit Union Times, "CU Realty CUSO Celebrates Successful First Year" in which she said the CUSO's objective for 2006 was for 80% of the members using the real estate brokerage to finance their purchases through their credit union. "In this fight for wallet share, it is important that banks have the ability to offer start-to-finish mortgage and housing solutions to their customers. It is unfair for credit unions to have the ability to offer these services, while many banks are excluded," the ABA concluded. -