ACUMA Summer 2016 Pipeline

SUMMER • 2016

ACUMA

g in at br le Ce

PIPELINE

20

MAGAZINE

s ar Ye

Mortgage Loan Leakage

By Tom Burton n Page 26

INSIDE Understanding Generational Perspective n Page 49 The Look of Mortgage Banking in 2020 n Page 40 Top 300 Mortgage-Granting Credit Unions n Page 55 20th Anniversary Conference Information n Page 19

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ABOUT ACUMA ACUMA

PIPELINE MAGAZINE

ACUMA Pipeline is a publication of the American Credit Union Mortgage Association, PO Box 400955, Las Vegas, NV 89140.

Mark Wilburn Truity Credit Union Chairman

Pam Davis

Delta Community CU Vice Chairman

Barry Stricklin Tower FCU Treasurer

Tim Mislansky

Wright-Patt Credit Union Secretary

John Reed

Maine Savings FCU Director

Who We Are

A

CUMA is an organization of and for credit unions, dedicated to the simple principle that credit unions have both an obligation and a competitive need to become a “premier provider of home loans for their membership.”

Michael Patterson,

ACUMA brings together the shared real estate lending and financing interests of thousands of credit unions and CUSOs.

Bob McKay

ACUMA member organizations include federal- and state-chartered credit unions and CUSOs, mortgage insurance companies, secondary market investors and investments banking firms, and technology companies operating in the field of mortgage banking.

Financial Partners Credit Union Director

Anheuser-Busch ECU Director

Amy Moser

Mountain America Credit Union Director

Anita Domondon Meriwest Mortgage Director

ACUMA

Bob Dorsa

President (877) 442-2862 bob.dorsa@acuma.org Learn more at acuma.org The information and opinions presented here should not be construed as a recommendation for any course of action regarding financial, legal or accounting matters by ACUMA, The ACUMA Pipeline or its authors. © Copyright 2016 by ACUMA. All rights reserved. Printed in the USA

Our Core Values

1

We are a non-profit trade association committed to promoting credit union mortgage lending proactively, positively, but not politically.

2 Our members are our owners and are treated as such.

3 We are committed to helping

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the Realtor community understand credit unions and the value they bring to promoting home ownership.

4 We maintain a high level of fiscal responsibility while ensuring that membership provides access to all employees of the credit union or CUSO and that events are high quality yet affordable.

5 We provide exceptional education and networking using experts from the mortgage banking, leadership and credit union communities.

Summer 2016 - PIPELINE 1

CELEBRATING 20 YEARS

President’s Column

As Our Anniversary Approaches, Celebrating 20 Years of ACUMA

By Bob Dorsa

1996 ... it was a very good year: n Credit Unions were preparing for their next logical step to becoming more viable for their members when it comes to housing finance. n Bill Clinton was serving his second term as president. n The Dallas Cowboys beat the Pittsburgh Steelers 27-17 to win the Super Bowl. n Muhammed Ali lit the Olympic Flame to open the Summer Games in Atlanta. n The Yankees beat the Braves in the World Series.

While all of this was happening, ACUMA was born ...

In 1996 Bill Walker was leading the Southern California CUREN and invited me to attend a meeting to discuss an expansion of the organization. The initial discussion was about creating a national mortgage CUSO, but based on my experience with CUSOS I was not sure it was the right time.

I suggested to Bill and the CUREN the formation of a nonprofit trade group that would be similar to NACUSO, a nonprofit trade group for CUSOs that I was managing at that time. That conversation got the ball rolling. NACUSO initially became the official managing entity for ACUMA, which elected its own Board of Directors.

Later that year, about the time the Yankees-Braves World Series was taking place, the first official ACUMA event was held in Seattle. Total attendance was 28. ACUMA was off and running.

The next ACUMA event took place in June 1997 in Washington, D.C., just a few blocks from where ACUMA will gather this September for our 20th anniversary conference.

2 PIPELINE - Summer 2016

ACUMA CHANGES WITH THE TIMES

The world has changed a lot in those 20 years. And ACUMA has changed with it.

One especially monumental event was the horrific 9/11 attack in 2001; I still recall in vivid detail the anguish that event brought to our nation and the impact it continues to have on the way we live.

I also remember agonizing over whether to go ahead that year with ACUMA’s fall conference, which had been planned for mid-October, only about a month after the tragedy. We went ahead with the event, which I still believe was the right thing to do, and people who registered decided to come—to get on with their lives and their businesses, hoping for better days ahead.

Then, in 2005, the ACUMA Board decided it was time to strike out on its own, making the decision to end its relationship with NACUSO. I had a decision to make, too. Since I have been involved with credit union mortgage

lending for 30 years, I decided to join ACUMA full time. And I’ve been here ever since, having the time of my life.

It was an especially good time in the mortgage industry—or so we thought.

We were almost giddy as home prices began to soar in the early part of the 21st century. Many ACUMA members started to think, “Wow, we can be competitive in mortgage lending markets.” That part, at least, proved true, after the 2008 economic collapse shifted the way consumers viewed Wall Street and Big Banks.

Still, it has taken the nation’s economy and the housing market in particular a good six or seven years to recover. Today we find a “new normal” for real estate with challenges and potential disruptions on the horizon. (Take Quicken loans, for example. How will credit unions answer the competitive challenge? )

A FIRST-CLASS TRADE ORGANIZATION

During ACUMA’s past 20 years, I could not have been more blessed to work with so many great people. We have many members who have been with us for 10- and 15-plus years to go along with those early adopters who joined in the late ‘90s. Their faces have become familiar at our workshops and conferences— they are our ambassadors, spreading the word about ACUMA’s value.

Together with Tracy Ashfield, who has become more and more involved with ACUMA since her early engagement in 2000, and the dozens of credit union professionals who have served on the ACUMA Board, we take great pride in having a truly first-class trade association.

Thanks to our members, new and old. We promise that the next 20 years will be more exciting that the first!

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THE IMPORTANCE OF ADVOCACY

A Message from the Board Part of Being a Mortgage-Lending Leader Is Telling Your Story

By Pam Davis

I

can hardly believe summer is here and our annual ACUMA conference is just a few weeks away. During this year’s conference, we will be celebrating 20 years of serving America’s credit unions in the mortgage lending space. I suspect many of you have attended most of the conferences held over the last two decades. I have been an attendee since 1998. Wow! Those years have flown by as we worked tirelessly to bring together credit unions and other vital industry partners, including Realtors.

A critical objective of our organization is to provide education, support and thought leadership on regulatory updates. Through networking and attending ACUMA sessions, which are always filled with timely regulatory updates, I feel that, as a whole, credit union mortgage leaders have been able to stay current and comply with all of the regulatory fastballs we have received.

Just think about all the changes that have occurred in the past 20 years: technology and the need for immediate loan decisioning, appraisal guideline changes, SAFE Act, TRID, CFPB, HMDA, Flood … and the list goes on.

Many of these changes have significantly impacted how we do business; they have also profoundly impacted our members’ experiences. I am also reminded of the mortgage trends that we didn’t adopt, such as Stated Income, Stated Asset, 100% LTV and No Verification Loans. Do you remember the pressure we felt to offer these loans?

With the knowledge gained and tools provided at ACUMA conferences and workshops, we have all pursued the

4 PIPELINE - Summer 2016

same goal: to help our organizations be compliant with these various regulations and industry trends.

We all diligently strive to comply with all of the “new” regulations, and I think we do a great job.

THE IMPORTANCE OF ADVOCACY

However, I feel that we are sometimes so engaged in complying and keeping our operations afloat that we do not look to the future. There is always the possibility that future regulatory changes may impact our members by making it more difficult–or expensive– to offer various products. We should consistently question whether we have focused so heavily on compliance that we have forgotten about advocacy.

In its most basic element, advocacy can be defined as speaking or acting in support of an issue or cause. Are we “blindly” implementing regulations that may not be in the best interest of our industry, members and organizations? Am I making my voice, or that of my organization, heard when and where it counts? We need to be vocal and shape policy, not just react to and enforce it.

“We need to be vocal and shape policy, not just react to and enforce it.”

Take a moment to ask: n Do I know my state-level lawmakers? n Have I contacted them about the credit union movement? n Does someone at my credit union track proposed rules and send commentary?

There is no doubt regulation is necessary and serves consumer interest.

We simply need to leverage our professional knowledge and experience to help policy makers craft legislation that achieves this goal. As the NCUA pushes to increase credit union membership in a proposed rule that should be ready this fall, which we all know is a positive approach, the question becomes: Is your credit union ready to engage?

I encourage all credit union leaders to become more involved in credit union advocacy. After all, who is better to advocate for the credit union industry than those who know it best? That, of course, is you.

Mortgage leaders have such a great story to tell. Make sure you are telling your story!

Pam Davis serves as the vice chair for the ACUMA Board of Directors, which governs the organization. She is the Senior Vice President, Branch Delivery and Operations, for Delta Community Credit Union. The opinions expressed here are those of the author.

)+$ 9$ 86'$ ORDQV SURYLGH D JUHDW ZD\ IRU &UHGLW 8QLRQV WR JHW WKHLU PHPEHUV LQWR KRPHV /HW XV KHOS \RX KHOS \RXU PHPEHUV ZLWK WKHVH IOH[LEOH ORZ WR ]HUR GRZQ SD\PHQW SURGXFWV Contact Us at 877.912.8009 or Info@myCUmortgage.com

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TABLE OF CONTENTS

1 Columns 1

Mortgage Loan Leakage

2 4 8

Page 26

9 11

About ACUMA Who we are, ACUMA Core Values President’s Column: By Bob Dorsa Topics of Interest to ACUMA Members and Mortgage Lenders A Message from the Board: By Pam Davis, Board Vice Chairman Comments about ACUMA’s Strategic Direction Compliance Challenges: By Kris Kully A Look at Pressing Issues Affecting Credit Unions Making a Difference: Honors, Awards and Recognitions for Individuals and Organizations Regulation and Legislation: By John J. McKechnie An In-Depth Look at Issues Affecting CUs at the Federal Level

64 The Last Word: by Tracy Ashfield

A Look at Big-Picture Issues Facing Credit Unions

12 In the Pipeline: Insights and Observations on CU Mortgage Lending 14 16 20 22 24

Page 30

SalesRecruiting Recruiting Sales 2020 2020

Hiring Right in the New World of Mortgage Origination

By Patricia M. Sherlock

Too Little, Too Late, Too Many Issues – By Tim Mislansky CFPB Puts Consumer First – By Mark McElroy Crunched for Time? – Arch Mortgage Insurance Company Home Buyer Profiles: NAR Survey Shows a Changing Market Workshops Provide ‘Deep Dive’ into Topics

26 Mortgage Loan Leakage: Are You Optimizing Your Process to

By Tom Burton

The following article is a chapter from Mortgage Professional Handbook. It is reprinted with permission.

Page 40

Capture Business … Or Letting It Seep Away?

30 Filene Studies Loan Motivators: What Drives Credit Union Members

to Choose Loans from Their CU ... or Someone Else?

Mortgage Origination

40 Sales Recruiting 2020: Hiring Right in the New World of

By Patricia M. Sherlock Generational Perspective

Page 49

49 Generational Perspective: A Key to Successful Recruiting and

Hiring, and a Collaborative Workforce

By Tom Burton

55 The Top 300: Take Time to Savor Last Year’s Numbers Summer 2016 - PIPELINE 7

FAIR LENDING: ADDRESSING DISPARATE IMPACT

Compliance Challenges

Fair Lending: Addressing Disparate Impact

By Kris Kully

T

he immense piles of additional data that the regulatory agencies will receive under the new HMDA rule will provide them (and even perhaps the public) with a quicker path to identifying a lender’s statistical fair lending disparities. A cynic might say that to find disparate impact in a set of data, all one has to do is look hard enough.

Since by definition, disparate impact discrimination can arise even when a credit union treats all of its members equally, how can a credit union assess its risk of disparities and address that risk to fend off fair lending scrutiny down the road?

Below, I highlight some areas that could expose a credit union to disparate impact risk.

PRICING DISPARITIES

There are many reasons that two similar members may get a loan with a different rate or fees. The regulatory agencies will examine a lender’s data to see whether any correlation exists between APR, rate, or fees; and race, ethnicity, or gender.

To prevent pricing exceptions from resulting in disparate impact, credit unions should consider limiting loan officers’ pricing discretion; implement and follow objective criteria for granting pricing exceptions; and thoroughly document the reasons for all exceptions. Allowing loan officers to pick their compensation levels (and their corresponding rate sheets) also is a practice that should be monitored to see if the pricing correlates with protected characteristics.

8 PIPELINE - Summer 2016

NEW PRODUCTS

Credit unions are dedicated to serving their members’ mortgage needs, for instance, by developing special products to serve first-time homebuyers, or special criteria for members with limited English proficiency. While those efforts may seem benevolent, they could result in members of a particular ethnic or racial group getting loans with different features or costs.

Credit unions should have and implement written policies for assessing the potential disparate impact risk of all new product offerings. They should ensure that they offer each member all the types of loans for which the member is likely to qualify. They also should analyze in advance all marketing efforts for new products to see whether the efforts target (or discourage) certain groups.

Credit unions that use marketing vendors should also consider any predictive models those vendors use.

While the models may predict response rates, they may not be consistent with fair lending obligations.

REDLINING

Redlining occurs when a lender is found to have denied or limited access to mortgage loans in a certain neighborhood based on its racial or ethnic com-

“Keeping lending and pricing policies as objective as possible, documenting exceptions, selfmonitoring, and taking quick corrective measures are important tools to address disparate impact risks.” position. While the targets of redlining enforcement actions have largely been banks with a duty under the Community Reinvestment Act to meet their communities’ credit needs, the fair lending enforcement agencies have indicated that they expect all lenders to serve minority neighborhoods in the lenders’ market areas, or at least to do so as well as their competitors.

To determine whether redlining disparities exist, the agencies will look at where the lender locates its offices and loan officers, and where they focus their marketing efforts. HMDA data will be helpful in identifying dis-

FAIR LENDING: ADDRESSING DISPARATE IMPACT

parities in minority neighborhoods (e.g., applications approved/denied in the area; types, features, or pricing of loans; all perhaps tracked against each loan officer’s identification number).

Credit unions may want to examine the geographic focus of their lending efforts and consider outreach to minority neighborhoods in their area.

SERVICING

The manner in which mortgage loans are serviced can also be a source of disparate impact scrutiny. Regulatory agencies will examine the policies and practices for offering loss mitigation options to members of different racial or ethnic groups, the speed with which loans are pursued into foreclosure, and the extent to which servicers offer add-on products like debt collection or suspension agreements.

“Disparate impact discrimination can arise even when a credit union treats all of its members equally.”

Credit union servicers should examine their data on these efforts, establish and follow objective default servicing procedures, and clearly document all servicing decisions and exceptions. Periodic training on fair servicing is also an important way to reduce the risk of disparate impact.

Disparate impact can seem to lurk everywhere, but at the same time it can be hard to prevent. Keeping lending and pricing policies as objective as possible, documenting exceptions, self-monitoring, and taking quick corrective measures are important tools to address disparate impact risks.

Kris Kully is a partner in Mayer Brown’s Washington, D.C. office. She concentrates her practice on federal and state regulatory compliance matters affecting providers of consumer financial products and services. Kully is a former lawyer for the Department of Housing and Urban Development. In that role, she provided legal counsel to the department on the mission oversight of Fannie Mae and Freddie Mac, the interpretation of the RESPA and the implementation of the department’s various housing assistance and community development programs.

MGIC In April 2016, more than 4,000 mortgage professionals trusted us with their professional development. Why? Because we are committed to ensuring our partners have equipped themselves for the road ahead.

It’s a culture of service and fiscal responsibility that has allowed us to build and maintain strong relationships with our credit union partners, and it’s the reason that credit unions continue to trust us to provide responsible riskmanagement solutions that support affordable homeownership.

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Summer 2016 - PIPELINE 9

MAKING A DIFFERENCE

Making a Difference Honors, Awards and Recognitions for Individuals and Organizations Helen Marrone, Director of Lending at Direct Federal Credit Union, received several awards at the recent Direct Federal Employee Recognition Celebration. Marrone earned the peervoted “Value in Practice: Drive” Award, which honors an employee for being “hard-working, energetic, and diligent in pursuit of individual team and organizational goals.”

Morrone also won a Business Impact Award for her work and involvement with Needham, Massachusettsbased DFCU’s Online Loan Application initiative, as well as the Credit Union All-Star Team award, presented to individuals whose names were repeatedly nominated across multiple categories. l Stephanie Dombrowski, Mortgage Loan Officer at Ent Credit Union, has been named to Mortgage Professional America’s “2016 Elite Women” list. The mortgage industry publication annually spotlights 100 women nationwide who “are shaping and changing the face of Dombrowski the mortgage industry.”

Dombrowski’s loan volume numbers have consistently earned her national recognition as a top producer.

This spring, Scotsman Guide listed her at No. 256 on its “Top Dollar Volume” list and No. 85 for “Most Loans Closed.”

Additionally, National Mortgage News ranked her at No. 87 in its “Top Producers” list for generating $85.8 million in loan volume for 2015.

“Those numbers reflect a real passion for educating and helping our members, as well as having the support of a first rate mortgage loan processing

and servicing team,” said Tony Sloan, Production Manager Loan at Colorado Springs, Colorado-based Ent. l Tanita Richardson, Assistant Vice President of Real Estate Lending for Chevron Federal Credit Union, has been named a “Woman to Watch” by the Credit Unions Times.

Richardson previously worked for Bank of America, Provident Funding, Countrywide and Washington Mutual. She joined Oakland, California-based ChevRichardson ron in 2006. She has worked in a variety of real-estate lending including sales, processing, underwriting and closing, secondary marketing, and credit risk and management. l Shirley Stange, Loan Officer at Ent Credit Union, has been listed in the 2016 Top Producers Rankings by the National Mortgage News. Stange ranked 12th on the list with year-over-year increase in dollar volume of loans originated in 2014 and 2015. She Strange logged a 78% increase in volume at Colorado Springs, Colorado-based Ent. l Members Mortgage Services, a Hutchinson, Kansas-based CUSO, presented 2016 awards to credit unions at its annual meeting in May. Recipients include: Trius Federal Credit Union, Kearney, Nebraska, the Rising Star Award for year-over-year increase in volume

among credit unions with assets under $100 million.

BluCurrent Credit Union, Springfield, Missouri, the Rising Star Award for year-over-year increase in volume among credit unions with assets of more than $100 million.

Credit Union of Dodge City, Dodge City, Kansas, the Shining Star Award for best in quality.

Emporia State Federal Credit Union, Emporia, Kansas, Credit Union of the Year Award as top producer among credit unions with assets under $100 million.

Credit Union of America, Wichita, Kansas, Credit Union of the Year Award as top producer among credit unions with assets of more than $100 million. l Radian Guaranty Inc. has been named a 2016 nominee for the Ellie Mae Hall of Fame. Radian was nominated for the Lender’s Choice Award for Best Service Provider from the Ellie Mae Network. Ellie Mae customers nominate the services providers for the annual recognition, given mortgage companies that have distinguished themselves in their use of Ellie Mae technology. l To celebrate their home purchase, the Jeanne D’Arc Credit Union Mortgage Team sponsored a housewarming party in May at the home of their new members, Rachel and Joseph Salamone.

The couple, who work in different cities, wanted to relocate to make their limit their commuting time. They didn’t anticipate any issues securing a mortgage, but their primary bank required strict qualifying parameters that See “Making a Difference” on page 15

10 PIPELINE - Summer 2016

SAVE THE DATE! for

2017 Events Experience the Difference

The ‘Deep Dive’ Workshops Go East and West The Annual Conference Returns to Las Vegas

ACUMA East Coast Worksho p National Harbor, MD East Coast Workshop

West Coast Workshop

Gaylord National Resort and Conference Center National Harbor, Maryland (near Washington, D.C.)

Motif Downtown Hotel Seattle, Washington (same program as Maryland)

June 6-7, 2017

June 20-21, 2017

ACUMA West Coast Worksh op Seattle, WA 21st Annual ACUMA Conference September 24-27, 2017 Bellagio Resort and Casino Las Vegas, Nevada (on the Las Vegas Strip)

CHANGES AHEAD FOR FUNDING MORTGAGES?

Regulation and Legislation Is Fannie/Freddie Conservatorship End In Sight?

By John J. McKechnie

T

he May announcement by Freddie Mac of a $354 million loss (its second in the last three quarters), coupled with Fannie Mae’s declining profit announced the same week, not only raised concerns about the overall health of the conserved GSEs, it also reinvigorated calls for Fannie/Freddie recapitalization and eventual release.

And those calls will continue to become louder as the conservatorships near the 10 year mark in 2018, a milestone few thought possible when the troubled mortgage giants were seized by the federal government nearly a decade ago.

ACUMA will be well-advised to watch the next acts in this play very closely, as the way in which mortgages are funded and sold into the secondary market could change dramatically in the next few years.

the bill, debt the GSEs owe to the U.S. Treasury would be considered repaid and the GSEs would be allowed to rebuild their capital reserves, ending the Treasury capture of the GSEs’ profits.

The Federal Housing Finance Agency (FHFA), which regulates the GSEs, would be tasked with coming up with a capital restoration plan for the GSEs. Once the GSEs reach a 5% capital level, the conservatorships would end and Fannie and Freddie would resume independent operations.

PUSH TO ‘RECAP & RELEASE’

LEGISLATION FAILING SO FAR

In the last year, calls to “recapitalize and release” Fannie Mae and Freddie Mac have intensified. A wide array of groups, including consumer and affordable housing advocates, civil rights activists on the Left, as well as the mortgage investor community and a conservative member of the House Financial Services Committee on the Right, have added their voices to the chorus who say the time has come to end the conservatorships and return the GSEs to independent operations.

Legislation to “recap and release”, HR 4913, sponsored by Rep. Mick Mulvaney (R-SC) a member of the House Financial Services Committee, was introduced in April. Under terms of

12 PIPELINE - Summer 2016

While Congressman Mulvaney’s approach is not considered likely to become law this year, it does give voice to the “recap and release” side in the debate. Prior attempts at legislative fixes to housing finance reform posited a future in which Fannie and Freddie would go away.

Both a Senate Banking Committee bill that would create a new GSE combining private capital and a government securitization platform (the Corker-Warner bill of 2013), as well as House Financial Services Committee Chairman Jeb Hensarling’s PATH Act, which would have eliminated a federal role in securitization entirely, failed to pass either chamber of Congress.

“Prior attempts at legislative fixes to housing finance reform posited a future in which Fannie and Freddie would go away.”

Credit unions voiced concerns with each of these approaches, particularly regarding the effect they would have on access to a secondary market.

To further complicate the picture, a new White Paper, authored by a group of housing policy experts with ties to a possible Hillary Clinton presidency, suggests that her administration would not look favorably on the “recap and release” approach.

The White Paper, “A Promising Road to GSE Reform,” rejects the notion of freeing Fannie and Freddie from conservatorship and instead recommends merging them out of existence and creating a single securitizer, called the National Mortgage Reinsurance Corporation.

Regardless of which reform option ultimately prevails in the next two-tothree years, CUs should be prepared to adapt to whatever new regime emerges.

John J. McKechnie is a partner at Total Spectrum, a Washington, D.C.-based team of companies providing strategic counsel and effective plan implementation using advocacy, research, communications, and political engagement.

You can reach him at (202) 544-9601 or jmckechnie@totalspectrumsga.com.

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VIEWPOINT: THE FHFA PRINCIPAL FORGIVENESS PLAN HOLDS PERIL FOR CREDIT UNIONS

Too Little, Too Late, Too Many Issues

The FHFA Principal Foregiveness Plan Holds Peril for Credit Unions

By Tim Mislansky

O

n April 14, the Federal Housing Finance Agency (FHFA) announced its plans for principal forgiveness to seriously delinquent borrowers. In case you’ve missed it, the FHFA is the regulator for Fannie Mae and Freddie Mac. n This plan has been in the making for about two years and comes way too late, and now it will cause credit unions wanting to be “memberlicious” (deliciously member-friendly) to be caught in the cross hairs of negative borrower reaction.

How so? Read on.

Well, first of all the plan is designed to help a “seriously delinquent borrower,” which the FHFA defines as a borrower who was 90 days past due as of March 1, 2016, had a balance of less than $250,000 and where the LTV exceeds 115%.

The idea is to forgive part of the principal so that the homeowner can retain the loan. There are specific guidelines

14 PIPELINE - Summer 2016

that must be meet and offers must be presented to borrowers by Oct. 1.

“How many of your members are upside down on a GSE loan and are also past due but not enough to hit the criteria?

PROGRAM FRAUGHT WITH RISK

On the surface this sounds good, even great if you can get past the government bailout idea. But it’s fraught with reputational risk and bad public reaction.

The program is only good on loans

owned by Fannie and Freddie, and they estimate it could impact as many as 33,000 borrowers. That’s it. Fannie and Freddie own millions of loans, so nearly 100% of them will not be eligible.

How many of your members are upside down on a GSE loan and who are also past due but just not enough to hit the criteria? I’m sure it’s a few. What do you tell them if they hear about the program and call you? “I’m sorry, you worked hard to keep your home and struggled to make payments and since you are not 90 days past due you don’t qualify.” That will be a fun conversation.

And since it’s only good on Fannie and Freddie loans, what about those borrowers who took out FHA, VA or USDA loans?

The GSEs may buy these loans, but their pricing indicates they don’t really want them. So must credit unions sell these to other aggregators or use a Ginnie Mae approval? Here’s another conversation:

VIEWPOINT: THE FHFA PRINCIPAL FORGIVENESS PLAN HOLDS PERIL FOR CREDIT UNIONS

“I’m sorry, because you took out a VA loan as a veteran and we didn’t sell your loan to Fannie, you don’t qualify.

Thanks for your service.” Or “I’m sorry, because you used the FHA program for your loan; we can’t offer this program to you and the foreclosure process will start soon unless we get a payment.”

PORTFOLIO LENDING ISSUES

And then there’s credit union’s portfolio lending. Members don’t want their loans sold. (Actually they most don’t want their servicing sold, but they don’t know the difference). So you keep the loan. Or you offer a portfolio product. Is your credit union going to offer principal forgiveness to match the FHFA program? We don’t have the money printing capabilities of the U.S. Treasury, so I would assume most will not.

Our obligation is certainly to help the member, but also the support the entire cooperative. Explain that to a member who is 90 days past due and in jeopardy of losing their home.

And finally, the financial crisis and housing crisis is in the rear view mirror. The conservatorship was eight years

“Whether you’ve sold loans to Fannie or Freddie in the past, or you have or don’t have any members who meet the criteria, you darn well better make sure you understand this program.”

ago. Most issues, except what to do with Fannie and Freddie, are behind us.

This involved millions of hard-working Americans who lost their homes (and some not so hard-working Americans

who greedily tried to exploit the system for huge personal gains). If my house was foreclosed upon five years ago, I’m asking why this program wasn’t around then, and I feel like I got treated unfairly.

So whether you’ve sold loans to Fannie or Freddie in the past, or you have or don’t have any members who meet the criteria, you darn well better make sure you understand this program and provide some talking points to your mortgage team. While this hasn’t made big news in the media, it certainly may.

If you want to stay “memberlicious,” you better be ready to talk with members who did not or cannot qualify.

Tim Mislansky is the Senior Vice President and Chief Lending Officer at Dayton, Ohio-based Wright-Patt Credit Union, and President of its wholly owned CUSO, myCUmortgage, LLC . He is also the secretary of the ACUMA Board of Directors. This article has been adapted with permission from Mislansky’s online blog. The views expressed are his alone. Sign up to follow his blog at mortgagesareamemberlicious.com.

“Making a Difference,” continued from page 10 the Salamones could not meet, especially when they had to also sell the home they were living in at the time.

They were introduced to Bo Stevens, Senior Loan Officer at Jeanne D’Arc, who was able to get them approved for a mortgage and into the home of their dreams.

To celebrate, the couple opened up their new home in Bedford, Massachusetts, to celebrate with 50 of their friends, family and co-workers, their Realtor and members of Lowell, Massachuetts-based Jeanne D’Arc’s Mortgage Team.

“We had some pretty challenging days when it seemed that everything [about the loan ] was going to fall apart,” said Rachel Salamone. “The absolute best part of our experience was working with Jeanne D’Arc and

TELL US ABOUT YOUR NEWS

Friends, family and co-workers of Rachel and Joseph Salamone gather at the Salamone’s home in Bedford, Massachusetts for a housewarming party, which was sponsored by Jeanne D’Arc Credit Union.​

Bo. Bo took all of the stress out of it.

He and his team were super responsive, informative, and stayed on top of anything that could have resulted in a delay or hassle for us.”

We publish news of credit union real estate industry honors, awards and recognitions of individuals and organizations. We also publish news of housing-related community recognitions, such as Habitat for Humanity projects and National Association of Realtors cooperative ventures.

Send your news to bob.dorsa@ acuma.org and include who, what (be specific), when, where and, if desired, a head-and-shoulders photo (150 dpi) identifying the person being honored (name, title, organization). Deadlines are November 15 for the Winter Issue and May 15 for the Summer issue.

Summer 2016 - PIPELINE 15

IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING

CFPB Puts Consumer First Credit Unions Need to Redefine Member Satisfaction in Light of TRID

By Mark McElroy

F

or the last nine months, mortgage lenders of all stripes have been consumed by TRID—and with good reason. n The magnitude of change TRID has spurred in the mortgage industry is unparalleled in recent memory.

However, TRID is about more than just a change in mortgage documents; it represents a change in expectations about the minimum level of service mortgage lenders should be providing to consumers.

Every action the Consumer Finance Protection Bureau (CFPB) has taken since its inception—from addressing Unfair, Deceptive or Abusive Acts or Practices (UDAAP) to enforcing the 2012 National Mortgage Settlement to the agency’s reaction to Quicken Loans’s Rocket Mortgage launch during the Super Bowl—has been driven by a “consumers first” mandate. The consumer experience matters, and to disregard or misinterpret it puts you on the wrong side of the CFPB. Credit unions are no stranger to a consumer-centric mentality, as member satisfaction is par for the course in terms of day-to-day consumer interaction.

However, the CFPB’s mandate speaks more to how transactions are conducted on the back end and the impact of these “business as usual” transactions on the consumer.

16 PIPELINE - Summer 2016

PART OF THE BIGGER PICTURE

Think about it this way. TRID is part of the CFPB’s larger “Know Before You Owe” initiative, which also includes the recent eClosing pilot. Both indicate the CFPB’s desire to see mortgage lenders change the operational aspects of how mortgages are originated and closed because the CFPB has observed how little the current mode of operation benefits the consumer. This type of change goes beyond everyday customer service and speaks to building a process around the consumer.

Take, for example, TRID’s guidance on the timing of Closing Disclosure (CD) delivery. TRID requires that consumers receive the CD at least three days prior to closing to provide adequate time for

the consumer to review and understand the document. For lenders that still mail paper copies of disclosures, there is an additional “snail-mail” period that must be added to the three days prescribed by TRID. As a result, these lenders are looking at a six- to seven-day waiting period from the day the CD is mailed to when closing can occur.

Since the closing date is determined at the start of the transaction, lenders and settlement service providers are working to a deadline. When challenges arise that make meeting the deadline impossible, lenders are forced either to delay the closing and inconvenience borrowers or potentially violate TRID to close on time. Furthermore, in a paper closing, it is difficult to prove that the borrower actually reviewed the CD as soon as it was

IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING

“The consumer experience matters, and to disregard or misinterpret it puts you on the wrong side of the CFPB.” received, thus creating another potential compliance issue for lenders.

What this illustrates is the weight the CFPB places on consumer satisfaction over mortgage lender convenience.

Though the TRID rule is light on specifics regarding how the CFPB expects lenders to comply, the Bureau has intimated a possible solution, one which shares its origins with TRID: eClosing.

RESULTS OF E-CLOSING PILOT

According to findings from the CFPB’s 2015 eClosing pilot: n eClosing participants receive documents sooner and review documents earlier than borrowers in paper closings. n eClosing participants also experience greater perceived empowerment and efficiency and understand the transaction better. n Last but certainly not least, eClosings are generally shorter than paper closings, particularly for purchases.

“eClosing provides credit union mortgage lenders with much-needed audit support.”

Thus, eClosing adoption is a simple way for credit unions to signal to the CFPB that customer satisfaction is a top priority. This theory has not gone untested, as credit unions were part of the eClosing pilot and have been among the early adopters of eClosing technology.

At the same time, eClosing provides credit union mortgage lenders with much-needed audit support. With today’s eClosing technology, lenders have access to a verifiable audit trail that demonstrably proves when the CD was sent, when the borrower acknowledged receipt and opened the CD and how long the borrower spent reviewing it.

In addition, by providing the CD to the borrower in an electronically secure environment, lenders avoid having to tack

on additional time to account for delivery via U.S. Mail.

While eClosing technology is not a panacea for all of credit unions’ TRID woes, it can provide considerable relief for several major aspects of the rule.

What’s more, adoption of eClosing technology very clearly aligns an organization with the CFPB’s mission, vision and values, which can, in turn, engender some very valuable goodwill with the CFPB. Thus, credit union mortgage divisions would be well advised to become champions of eClosing technology within their organizations.

Mark McElroy is CEO & President of Pavaso, a provider of electronic collaborative technology solutions for the real estate life cycle. He can be reached at mmcelroy@pavaso.com.

Summer 2016 - PIPELINE 17

Shared Vision. Mutual Pride.

Planning, experience and resources lay the groundwork for the future. Our partnership with you supports improvement and growth for your community.

Our members have the opportunity to earn credit enhancement fee income while leveraging secondary market options available through the Mortgage Partnership Finance® Program.

Contact us today to find out how your institution can share the benefits of the MPF® Program with your community.

Visit www.fhlbmpf.com or call 877.463.6673

“MPF” is a registered trademark of the Federal Home Loan Bank of Chicago. The “MPF Mortgage Partnership Finance” logo is a trademark of the Federal Home Loan Bank of Chicago.

ACUMA 20TH ANNIVERSARY CONFERENCE

Register Now Online at acuma.org for 2016’s Biggest Event in Credit Union Mortgage Lending In 20 years, ACUMA has grown from a handful of credit union leaders trading notes to a vibrant organization providing mortgage-lending CUs access to the industry’s leaders, innovators and peers to learn and share the knowledge. ACUMA has built its foundation on education and networking.

Now, to celebrate its growth—along with the growth of credit union mortgage lending—ACUMA invites you to our nation’s capital to join the discussion about next steps to keep building on success.

Washington, D.C. n September 18-21, 2016

Lawrence Yun NAR Chief Economist

Juliet Funt

Craig Martin

Brian Chappelle

WhiteSpace at Work CEO J.D. Power Sr. Director Potomac Partners Founder

Jim Nussle

Dan Berger

CUNA CEO

NAFCU CEO

The 20th anniversary conference brings you to Washington to: n Hear presentations by congressional representatives, industry leaders and top government regulators. n Discuss important mortgage-lending issues with your peers, presenters and a variety of government officials engaged in legislation and regulation affecting the mortgage lending industry. n Learn more about how to advocate for credit union mortgage lending and why it’s so important to the future. n Participate in ACUMA’s special 20th anniversary events, including a closing-day rooftop luncheon overlooking the Capitol and a luxury bus tour of beautiful Washington, D.C. The conference is held at the Renaissance Downtown Washington, D.C. Hotel, a high rise less than a mile from the White House and just over a mile to the Washington Monument. In addition to conference facilities, the hotel offers three restaurants, a bar, coffee shop, full-service spa and fitness center.

IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING

Crunched for Time?

Insure Your Loans Faster When You Plan Ahead

I

n the post-TRID world, credit union professionals find that time is more than ever at a premium. As new regulations complicate the business, mortgage loans need more time to process, but your fee stays the same, whether you spend three hours or six hours on a given loan.

How can you underwrite more business in less time? If your loans require mortgage insurance (MI), work with your provider to minimize delays.

TIPS FOR QUICKER MI UNDERWRITING

Credit unions pressed for time want to know how they can be certain that the loans they submit for mortgage insurance will be turned around quickly.

While there’s no iron-clad guarantee, CUs can consider these recommendations to streamline their process and reduce delays: Don’t fax or email the loan file; submit it online. Online means faster, more secure, always legible and fewer errors.

20 PIPELINE - Summer 2016

Make sure your loan file includes all required documents and information.

For example, if there is a co-borrower on the loan, don’t forget to include the relevant credit information.

Review the loan application form (1003) and ensure it is fully completed.

This gives the underwriter the full “story,” reducing follow-up questions.

Check that no unnecessary documents are included in the file, because the MI underwriter is required to review each one, even if it is irrelevant to the decision. Examples include disclosures, state tax returns and condo bylaws. The underwriter will let you know if they need additional information.

Once your file is underwritten, if there are any conditions on the loan, submit them all at once. This reduces multiple “touches” by the underwriter, thus speeding up the approval process.

Run your scenario through an automated underwriting system (DU® or LP®) and process the loan based on those findings. Adjust the scenario and see how the findings may change, depending on the credit score, LTV, loan program, etc. A fully processed and verified file can be turned around quickly by the MI underwriter.

If available, sign up for your MI provider’s Loan Alert system. You’ll receive an automatic text or email whenever the status of your loan changes, allowing you to track your pipeline more easily.

“Incorporating these tips into your routine will shorten turnaround times,”

“Credit unions pressed for time want to know how they can be certain that the loans they submit for mortgage insurance will be turned around quickly.”

says Karen Wilhelm, Underwriting Manager at Arch MI. “While initially you might have to take more time to remember to do the checks, you will eliminate the delays and back-and-forth between the underwriter and your staff down the line.

“The result will be a boost in overall efficiency, speed, and accuracy for your MI-insured business.”

This article was provided by Arch Mortgage Insurance Company, which provides mortgage credit default protection using proven systems supported by experienced professionals dedicated to making customers the top priority and providing outstanding service with a personal touch. Arch MI believes in the value of mortgage lending, and providing lending customers with products and services to help their borrowers achieve homeownership.

DELIVERING VALUE TO OUR CREDIT UNION PARTNERS At Radian we’re redefining what it means to be a mortgage insurance provider.

Our dedication to helping Credits Unions provide solutions for their members is unparalleled. With services that span the mortgage spectrum, we’re more than a reliable partner, we’re an indispensable one.

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Contact us today to learn more about all that Radian has to offer!

Bill Walker National Account Manager, West 714.330.5895 bill.walker@radian.biz

David Mills National Account Manager, East 937.321.6641 david.mills@radian.biz

David Shuart, CMB National Account Manager, West Central 214.906.3322 david.shuart@radian.biz

Paul Gawin, CMB National Account Manager, East Central 513.659.8977 paul.gawin@radian.biz

Tammy Fitzpatrick Account Manager, West 215.231.1181 tammy.fitzpatrick@radian.biz

Michael Mullarkey Account Manager, East 215.231.1420 michael.mullarkey@radian.biz

www.radiancu.biz | 877.723.4261

IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING

Home Buyer Profiles NAR Survey Shows a Changing Market

T

he median age of a U.S. home buyer has climbed five years since 2010. Married couples comprise 67% of home buyers, an increase from 58% in five years.

Homes purchased by single females has fallen by almost half during the same period.

These statistics are among the most revealing of the numbers documented in a recent research project by the National Association of Realtors. The data offer opportunities for mortgage-lending credit unions to develop strategies to attract home buyers. It’s important to understand today’s home buyers so you can be ready to tailor loan products, especially for younger buyers, when they decide to seek home ownership.

The NAR’s “2015 Profile of Home Buyers and Sellers” includes 6,363 respondents who bought homes between July 2014 and June 2015. It shows an upward trend in the age of home buy-

ers overall and the lowest percentage of first-time home buyers ever uncovered in the annual NAR survey.

Importantly, the survey showed that 87% of the home buyers purchased their home through a real estate agent or broker. For credit unions that have not reached out to Realtors, now is the time to establish relationships.

The statistics demonstrate the changes taking place among home buyers, as well as implications for mortgage sellers.

As Millennials (born between 1980 and 1995) continue to reach adulthood and secure employment—they are expected to comprise 50% of the U.S. workforce

“According to a Fannie Mae study, more than 90% of Millennials want to own a home ‘eventually,’ but many are waiting longer …”

by 2020—the issues they face are making a major impact of how, and when, homes are bought and sold.

In NAR’s most recent profile, firsttime buyers comprised just 32% of the market for new and existing homes, the lowest percentage recorded. Many factors are influencing the slowdown, especially among Millennials.

THE WAITING GAME

According to a Fannie Mae study, more than 90% of Millennials want to own a home “eventually,” but many are waiting longer to ensure they can afford the expense (or even qualify for a loan), as well as match their lifestyle choices.

The study notes that Millennials are staying in school longer and waiting longer to get married and have children. A significant subgroup of Millennials also prefer urban living, where a higher percentage of the population are renters.

Also mentioned prominently for Millennials who pursue college degrees is the rising amount of student debt they are accumulating: the national average has topped $25,000.

These factors have combined to delay home purchases by younger buyers and slowed the growth of mortgage

22 PIPELINE - Summer 2016

IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING

originations. The U.S. Census Bureau reported that while Millennials comprised 28% of the U.S. population in 2014, only 17% were the head of a household (own and rent) and just 8% owned homes.

The Fannie Mae study also notes that the Millennial generation’s cautious approach has been shaped by incidents in their youth, including the 9/11 terror attacks and the 2008 financial crisis.

OTHER TRENDS

Reflecting the recent financial crisis, the NAR study showed that percentages of single male and female home buyers in the overall market are down by 5 percentage points (20% to 15% for female; 12% to 7% for male) from five years ago.

The average first-time buyer in the study was 31 years, earned $69,400 annually and bought a home priced at $170,000. The average repeat homebuyer was 53, earned $98,700 and paid $246,400.

Senior housing made up just 8% of the study’s participants; unmarried couples comprised 7%. And 13% lived in multigenerational housing (excluding children).

Also, home buyers with student debt included 25% of the overall sample.

“Also mentioned prominently for Millennials who pursue college degrees is the rising amount of student debt they are accumulating …”

CHART 1

HOME BUYER COMPARISON

Median Age Gross Household Income Married Couple Single Female Single Male Unmarried Couple Children in Home Owns Second Home

2010 2015 39 44 $72,200 $86,100 58% 67% 20% 15% 12% 7% 8% 7% 35% 37% 14% 19%

Source: National Association of Realtors “2015 Profile of Home Buyers and Sellers”

But credit unions must be vigilant to stay ahead of the curve. For all the delays, for example, Millennials will seek homes to buy as they grow older, and recent study points to them pursuing home ownership in larger numbers.

The “Home Buyer and Seller Generational Trends Report 2016” conducted in July 2015 by NAR for home buyers during the previous year showed that about one-third of those were Millennials—more than either Baby Boomers or Gen Xers (the smaller-in-population generation between the two).

FOOD FOR THOUGHT

The data indicate that successful mortgage lenders must: Work with Realtors, who have established relationships with sellers and buyers alike and know their communities— just like credit unions. Bring them into the CU for product updates and include some snacks and soft drinks. Invite them to lunch to talk about working together.

And most of all, keep them in the loop when their loan is in your pipeline.

Be agile in responding to changes in housing trends (Are condos selling well?

Starter homes? Retirement communities?). What has worked in the past won’t work in the future. Know your membership—and the potential for new mem-

bers; be ready when they want to establish and build relationships with you.

Build and develop all channels— online, branches, telephone—whatever works for any member; convenience is king. Make sure your processes are efficient and easy for your members to use.

Aim high: You may not be able to close all loans in 30 days, but you should make it your goal.

Offer diversity in your loan products. What do your members need? If you can offer non-conforming loans that help them but don’t put your CU in harm’s way, go the extra mile; it’ll come back to you in good ways and help you attract a bigger wallet share, too.

Ask yourself, constantly, are we doing the best we can? If so, make sure your community knows it—talk yourself up where potential members can find out about you. And get involved in the community by sponsoring fundraising events and volunteering for community service.

Credit unions that study home buyer trends and apply the knowledge to their own membership can succeed in the mortgage market into the future.

For more information on the NAR survey, visit www.realtor.org/reports/ highlights-from-the-2015-profile-of-homebuyers-and-sellers.

Summer 2016 - PIPELINE 23

2016 ACUMA WORKSHOPS

Workshops Provide ‘Deep Dive’ into Topics The 2016 ACUMA Workshops provided in-depth material on mortgage lending trends and credit unionspecific content, receiving high marks from attendees.

Held over two days in Tempe, Arizona and San Antonio, Texas, the sessions brought to participants opportunities for extensive networking with other CU mortgage leaders, as well as conversations and questions for the many expert speakers. Mortgage-centric topics delved into the latest on fraud, compensation, recruiting and hiring, and more. The combination of presentations and talk-show

Andy DeLuca, Kinecta FCU, and Liz Brink, WrightPatt Credit Union, discuss what it takes to be a “top Gun” loan officer.

interview formats kept things interesting. Generational expert Phil Gwoke led interactive sessions that explored generational differences of employees and how to work collaboratively—a necessity for CUs moving forward as Boomers retire and Millennials soon to hold half of the jobs in the U.S. workplace. (See related article in this issue.) Dates and locations for the 2017 workshops are set: June 6-7 in Oxen Hill, Maryland (near Washington, D.C., and Alexandria, Va.) and June 20-21 in Seattle (programs are the same).

Moderator Tracy Ashfield (right) talks about how recent regulations have caused credit unions to restructure their mortgage operations with Dwana Manning (left), Delta Community CU, and Marsha Bradshaw, Tower FCU.

Consultant Phil Gwoke talks about generational differences and how they affect the workplace at the San Antonio workshop.

24 PIPELINE - Summer 2016

2016 ACUMA WORKSHOPS

CUNA’s Michael Christians presents the latest on compliance issues to workshop attendees in San Antonio.

Above: Casey Filburn, Wells Fargo, and Marsha Bradshaw, Tower FCU, share how their credit unions are using multiple channels to provide optimal member access at the Tempe workshop. Right: California attorney and regulatory specialist Mark Aldrich leads a workshop session on mortgage fraud.

2017 Workshops—Save the Dates! n JUNE 6-7 IN NATIONAL HARBOR, MARYLAND (NEAR WASHINGTON, D.C.) n JUNE 20-21 IN SEATTLE Summer 2016 - PIPELINE 25

FEATURE ARTICLE

26 PIPELINE - Summer 2016

LOAN LEAKAGE

Mortgage Loan Leakage Are You Optimizing Your Process to Capture Business …

Or Letting It Seep Away?

By Tom Burton

Americans have become a society of shoppers. With communications moving into the digital age, it’s pretty simple to shop online—with a laptop or smartphone. And that only adds to the omnipresent marketing of shoppers on TV and radio, billboards, through the mail, by phone, etc. n Credit unions in general have a good online presence. They get lots of shoppers and loan applications online to supplement other channels (at branches, on the phone, through advertisements). n Since the 2008 financial crisis, credit unions increasingly have become an attractive source of mortgage loans, and getting more shoppers means more potential closings.

And price isn’t the only factor for many shoppers—they want to do business with someone they trust, giving credit unions an advantage. n The trick is to make the most of these shopper opportunities. Before you go searching for new business, make sure you are capturing the opportunities that are right in front of you.

Summer 2016 - PIPELINE 27

LOAN LEAKAGE

“Everybody’s talking about finding new sources for leads and loans,” says mortgage lending consultant Tracy Ashfield.

“But too often when a credit union starts to really focus on lead management, pre-approval conversions and follow-up, they find they are missing out on opportunities that have already come in the door.”

Imagine for a minute that on Monday morning the mortgage department at your credit union returns to work with 50 applications awaiting the overtaxed loan officers. Even when the new apps are divided among them, they can’t get to every one, so they focus on to the ones they think have the best chance of closing.

The rest? It’s likely they are ignored or put on the back burner where they will be forgotten when the next week’s apps arrive and the cycle begins again.

That’s major leakage. Loan apps that don’t get immediate attention, and even ones that don’t get approved, should not be swept under the rug. Potential remains for the shopper to return later under better condition. But left unattended, this loan leak will flow elsewhere—to another lender most likely.

It’s the first point in the loan pipeline where opportunities are lost. But not the only one. A smart credit union will develop a strategy to plug leaks and improve the pipeline to keep communications open.

pipeline. You may not win all of these battles, but you surely will lose them all if you don’t nurture the potential relationship. If they seek pre-approval, let them know, quickly, if you can get it done. If yes, keep in touch—find out what they need and who they’re working with on the home purchase. Then bring that person into the loop.

Even if the shopper doesn’t qualify for a loan—and you’ve tried everything you can, stay in touch with them. Their situation may change, or you may expand your own loan products.

Finally, the “Ready to Close” shoppers want to move fast.

They are looking to refinance—now—for a better rate. They have likely already done their shopping, so if they don’t get a prompt response from you, they are on to their next option— and quickly.

This leak occurs when an inquiry is made and follow up is not taken after the information is supplied. For instance, the Ready to Close shopper fills out an application and then waits for approval … and waits. And moves on—another leak that should have been plugged, could have been plugged by a loan department that asked the right questions during the inquiry and made certain that follow-up action would be taken in a matter of days.

IMPROVING THE PROCESS

Each of these groups brings a different challenge to the mortgage department. When credit unions focus only on the Let’s divide mortgage loan shoppers into three main group that is closest to closing on a loan, they miss the opporgroups. Each group brings a varying commitment to obtaining tunities that can turn into closings next month. a loan. But all three are important to engage because eventually Applicants should expect a response in a few days. Those all of them are likely to buy a home. that don’t get one—they’ll go elsewhere. And it doesn’t matter The first group can be called “Get Organized” shoppers. which shopper group they fall into: Without contact, they are They want to know what you have to offer. Providing informa- lost, maybe moving on to a Big Bank or checking out Quicken. tion on your loan program and steering them to an application The challenge, then, is to find a way to plug the leaks. Evis the easy part. More of a challenge is staying in touch. These ery mortgage-lending credit union has processes in place deshoppers will drift away from you without encouragement. signed to get the loans to closing. How well that process works It’s important to engage them, find out what they need should be measured in some way with an eye toward making and deliver it. Then stay in touch. Automated communications improvements. Let’s talk about how that can happen. can provide one avenue. Campaigns—postcards, newsletters, First, examine your processes to see where leaks are ocemails, phone calls—can be handled internally or outsourced curring. Can you quantify them? Surely you can examine the to a vendor. They key is staying in touch, responding to further percentage of apps that close—that’s one way. A more difficult inquiries, providing a route through your pipeline. measurement is the number of leads—do you know how many Next come the “Shop and Buy” group. They are usually al- leads turn into apps, and then how many close? ready working with a Realtor, looking As you dig deeper you can uncover at properties and ready to make an potential glitches along the pipeline. offer on one they like and can afford.

“Loan apps that don’t For instance, how many handoffs ocThese more serious shoppers are comcur when a mortgage lead is fielded? get immediate paring rates, but also examining cusLogic tells you the more handoffs, the tomer service and other factors such better chance of leaks. Then, can you attention, and even as convenience, existing relationships streamline the process? ones that don’t get with financial institutions and—not Another key question: How do least important on their list—the adyou follow up on leads in general and approved, should vice of their Realtor about whom to applications in particular? Is there a not be swept under checklist of actions and a time frame? contact for a loan.

It’s vitally important, then, to put Who are the people involved? How the rug.” your best face forward to these shopdoes the process vary depending on pers—or face another leak in your the channel? For example, does a face-

SHOPPING GROUPS

28 PIPELINE - Summer 2016

LOAN LEAKAGE

“When credit unions

to-face application in a branch prooffs, more incentives, a different path ceed the same way along the pipeline for the pipeline, a change in a job defocus only on the as an online app? scription. Whatever improvements are group that is closest “Managing incoming leads is considered, involve staff in the discuscrucial,” notes consultant Ashfield. sions and emphasize the importance to closing on a loan, “And although ideally handled by a of the project. Post a timeline for outthey miss the loan officer, many credit unions have comes and stick to it. Share the final found sales assistants or loan officersproposal with leadership. If you’ve got opportunities that in-training are able to provide initial their support, you can move forward. can turn into follow-up on incoming leads.”

Armed with your findings, you Incentives are another point of can now set goals for the proposed closings next month.” discussion. How are leads rewarded? improvements. Project the increased Are CU employees outside of the percentage of loan closings under mortgage department included? If so, the improved processes, for instance. what defines a lead and what information is gathered?

How does that increase the numbers? More loans closed Check in with your peers. Find out how other credit unions means more members in homes, as well as more dollars for have laid out processes. How do they plug leaks? the credit union.

Finally, get buy-in from your leadership. That doesn’t mean And finally, a boost in the ROI will allow you to justify the you need to start with a big budget request or ask for support expense of the improvements. for major changes. Begin with fact finding and build a case. If you aren’t able to identify improvements in this step and later Tom Burton is a freelance writer and editor who worked for justify related expenses, you won’t proceed anyway.

10 years in the credit union industry. He provides communicaAssuming you do identify potential improvements, the tions consulting for ACUMA. Previously, he was an editor and next step would be to propose changes. Maybe it’s fewer hand- manager at a daily newspaper.

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CUMA provides unsurpassed educational and networking opportunities for mortgage-lending credit unions. One initiative is working to cultivate relationships with The National Association of Realtors (NAR) and the Realtors themselves—like credit unions, an organization and individuals that work within their own communities to help people buy homes.

In the upcoming August-September issue of Realtor magazine, sent to 1 million-plus NAR members, ACUMA is running the accompanying advertisement to raise recognition of credit unions and help Realtors see the advantages of working with CUs.

Help us tell Realtors about the credit union difference—that CUs are a viable lending source—by supporting ACUMA’s presence at the annual NAR convention in Orlando in November. Your contribution help raise awareness of credit unions and establish relationships with some of the 15,000 Realtors in attendance at the convention who interested in working with CUs. For more information, Contact ACUMA President Bob Dorsa at bob.dorsa@acuma.org or (877) 442-2862.

Summer 2016 - PIPELINE 29

FEATURE ARTICLE

Filene Studies Loan Motivators

What Drives Credit Union Members to Choose Loans from Their CU ... or Someone Else?

The Filene Research Institute recently published an extensive study to understand not only why members prefer credit union loans, but what specific drivers move them to use competing banks and credit unions. The next eight pages (reprinted with permission) contain key findings of the study, which consisted of interviews with more than 5,000 current CU members who applied for a loan within the past three years.

A

s the Filene report notes, “With high-value loans like mortgages, home equity lines of credit (HELOCs), and even auto loans, it will be years before members are back in the market. That makes it essential to understand why your members do choose your loans, and, more importantly, why they bypass you for competitors.”

In the report, “A Wallet Application Rule Approach to First Mortgages” by Lerzan Aksoy, Professor of Marketing at Fordham University, Filene focuses on first mortgages and what credit unions can do to capture a significant share of this market. Here are some of the common themes that emerged from the research: Credit unions must do a better job of making their members aware of their ability to offer the loans that best meet members’ needs.

30 PIPELINE - Summer 2016

Among members who chose the credit union for their mortgage, the most important factor in their choice was their perceived relationship with the institution.

Banks are perceived as offering “better fitting” loan types and appear to have better relationships with mortgage brokers.

Members value price (i.e., loan interest rate) as an important driver for mortgages regardless of the financial institution.

The introduction to the report can be found on the Filene website: filene.org/research/report/a-wallet-allocation-ruleapproach-to-first-mortgages Filene members can download the entire report, and much other valuable research. Our thanks to Filene for allowing ACUMA to publish a snapshot of the report on the next pages of the Pipeline.

FILENE STUDIES LOAN MOTIVATORS

Reprinted with permission of the Filene Research Institute

Summer 2016 - PIPELINE 31

FILENE STUDIES LOAN MOTIVATORS

The purpose of this study was to investigate the multi-institution behavior of credit union members. The goal was to gain insight into how and why members choose a loan provider among competing financial institutions; specifically, the focal credit union (*the credit union participating in this research), competing credit unions, and banks. It was designed to measure attitudinal and behavioral loyalty at both the brand- and respondent-levels (i.e. institution- and member-levels).

Reprinted with permission of the Filene Research Institute

32 PIPELINE - Summer 2016

FILENE STUDIES LOAN MOTIVATORS

To link member perceptions and attitudes to their selection of a loan provider, this study applied the Wallet Allocation Rule approach to uncover the primary reasons members selected the studied credit union, a competing credit union, or a bank as a loan provider.

Reprinted with permission of the Filene Research Institute

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FILENE STUDIES LOAN MOTIVATORS

The Wallet Allocation Rule is designed to predict the “share� that customers allocate to the brands that they use. In polygamous (multi-brand use) categories, it strongly links to share of wallet (i.e. the share of business that customers allocate to a brand in an industry category). In single brand use categories, the Wallet Allocation Rule can be used to understand the share of mind that customers allocate to the brands customers consider using, or to establish the relative importance of various attributes customers use to decide which brand to use.

Reprinted with permission of the Filene Research Institute

34 PIPELINE - Summer 2016

FILENE STUDIES LOAN MOTIVATORS

Credit unions have an opportunity to gain a greater share of loans at the expense of their bank competitors in a number of loan categories.

But this will not be done by focusing exclusively on the “relationship� aspect of their offering, particularly since credit unions tend to already be perceived by members as performing significantly better than their bank competitors. Instead, credit unions need to identify and minimize the specific reasons that members have chosen to use a bank for a particular type of loan.

Reprinted with permission of the Filene Research Institute

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FILENE STUDIES LOAN MOTIVATORS

TYPE OF RESEARCH CONDUCTED

Mortgages represent the largest component of household debt in the United States. This is primarily driven by the large size of a typical first mortgage relative to other loans that consumers hold.

The typical size for a mortgage among our sample is approximately $290,000, making mortgages by far the highest-value loan for the vast majority of credit union members.

Reprinted with permission of the Filene Research Institute

36 PIPELINE - Summer 2016

FILENE STUDIES LOAN MOTIVATORS

Reprinted with permission of the Filene Research Institute

Summer 2016 - PIPELINE 37

FILENE STUDIES LOAN MOTIVATORS

IMPLICATIONS

For first mortgages it is clear that banks are perceived as offering better-fitting loan types, and they also appear to have better relationships with mortgage brokers.

Growing the percentage of members who use the credit union for mortgages will not be achieved by focusing solely on member relationships, since credit unions are already winning on this driver. If members’ perception that banks are able to offer better-fitting mortgage solutions is accurate, credit unions need to broaden their current product offerings. If this perception is incorrect, credit unions must do a better job of making their members aware of their ability to offer the loans that best meet members’ needs. It is also clear that credit unions must work to build strong relationships with mortgage brokers. They first need to understand why they are not recommended more frequently; once they understand why, they must actively work to address the issues mortgage brokers have with recommending the credit union. Download insights on 6 other credit union loan products at filene.org

Reprinted with permission of the Filene Research Institute

38 PIPELINE - Summer 2016

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FEATURE ARTICLE

Sales Recruiting 2020 Sales Recruiting 2020 Hiring Right in the New World Hiring Right inOrigination the New World of Mortgage Patricia M. Sherlock of ByMortgage Origination

By Patricia M. Sherlock

The following article is a chapter from Mortgage Professional Handbook. It is reprinted with permission.

The following article is a chapter taken from “The Mortgage Professional’s Handbook” edited by Jess Lederman & Tomasz Lasota. It is reprinted with permission.​Order your copy at mortgagebanking2020.com

40 PIPELINE - Summer 2016

SALES RECRUITING 2020

When looking at the future of mortgage origination recruitment 1,850 days out, it may seem like a long way off, but we are on the cusp of significant economic and demographic shifts that will forever change how the industry selects originators. n The fundamental question in 2020 regarding hiring is: Will recruitment continue as it always has—locally driven and unstructured, or will it look completely different as we move deeper into the 21st century?

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SALES RECRUITING 2020

I

believe the latter will happen, and in this chapter I will discuss:

n The economic game-changers that will impact mortgage lending. n How sales talent technology will increase prediction success and reduce failure rate. n How Gen Y differs from the current generation of originators. n The rise in importance of having a culture fit match. n How realistic job previews will help in recruiting non-experienced mortgage candidates.

FROM LOCALLY BASED TO BIG BUSINESS

In the past 100 years, mortgage banking has transformed from a small business to an industry that is a major driver of the U.S. Gross Domestic Product (GDP). According to a recent report from the U.S. Bureau of Economic Analysis, the housing finance market is 15.24% of the country’s total GDP. Major innovations have changed the face of mortgage banking, including the growing influence of federal agencies and their mission of liquidity; rise of MBS securitization and the structure finance; and automation of securities trading.

All of these factors have helped skyrocket investor demand for mortgage finance assets. As a result, job candidates’ interest in mortgage sales has been strong over the years; even though, the housing finance industry has a track record of boom and bust.

The projected economic dynamics and demographics shifts facing the mortgage industry have been hot topics at industry conferences and in trade papers.

An increasingly savvy customer

By Patricia M. Sherlock base with access to incredible amounts of information 24/7; an aging mortgage sales force (with the average age of the originator estimated to be 54 years old); and growing ethnic diversity in the nation are all factors that will impact our industry’s future workforce and determine what the origination position will look like.

The United States Census Bureau has projected that more than half of the nation’s children are expected to be part of a minority race or ethnic group (50.2 percent of the under-18 population) five years from now.

Sales Recruiting 2020 Hiring Right in the New World of Mortgage Origination “Hiring quantity over quality has long been the norm in the industry—the only hiring requirement being prior experience in mortgage banking and a book of business.”

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WHAT TODAY’S RECRUITMENT LOOKS LIKE

With record growth in the industry, managers have moved from hiring people they might have known—including select friends and relatives—to recruiting as many candidates as possible. Today, a manager who fails to meet a company’s hiring goals will be terminated; whereas, not developing one’s originators is not a typical cause for termination.

Hiring quantity over quality has long been the norm in the industry—the only hiring requirement being prior experience in mortgage banking and a book of business. In reality, many sales organizations have chosen to “rent” their originators instead of developing their own. The price of renting originators is high turnover or failure rate in sales organizations. In many ways, mortgage banking has been an Uber-based sales organization way before the company’s mobile app was released in 2009.

High turnover and poor customer experience have become a cost of doing business for mortgage banking firms who forgo a structured hiring process. This quantity approach has added substantial expenses, including visible and invisible items to income statements, such as direct costs of replacing the loss of an originator, the lost sales opportunity, and more importantly, the reputational damage due to a poor originator ruining a lender’s ability to do business in a marketplace. When the industry was in an expanding environment, the cost of a high failure rate could be mitigated, allowing executives to ignore this issue.

Moving forward, the growth gravy train in mortgage lending will be replaced by extreme competition for market share.

As Nielsen reported in The United States in 2020: A Very Different Place “… the Baby Boom ages, and birth rates remain low, household sizes will decrease. The number of children per family will get smaller. Between now and 2020 the U.S. will experience very minor growth per household spending.”

This new norm for mortgage lenders will necessitate a change in how they staff, plan, lead and invest in an information age environment.

WHAT REDUCED GROWTH MEANS FOR HIRING

There are three key areas to understand for hiring smart in 2020 and beyond:

1. DEMAND FOR SKILLED ORIGINATORS The inability to hire skilled originators will hamper companies and prevent them from building scalable operations in the future. The problem is rearing its head already as companies are in a mad dash to find good talent. As a result, many companies are overpaying for talent in an attempt to fix this issue.

The problem is that the number of top performers has shrunk due to many factors and what used to be the 80/20 rule (20% outperforming the remaining 80%) is more like 90/10 today. With a lower number of high performers available, greater demand has increased costs.

Similar to sports teams who depend on superstars for revenues, mortgage banking has been faced with the increasing costs of acquiring superior talent. The other side of the coin is when desperate companies overpay for average performers who do not meet expectations, financial disaster can result.

SALES RECRUITING 2020

Sales Recruiting 2

Hiring Right in the N of Mortgage Origina While some think the answer to this challenge is to automate the selling process and eliminate the sales person, most experts agree that is not likely within the next five years, if ever. Even if it is developed, automation to improve the loan process can only go so far. Selling to a skeptical buyer is by definition a human process that requires non-routine skills, such as relating, convincing and influencing.

Even the U.S. government’s data supports this fact by projecting that selling positions will be one of top three occupations in 2020.

2. COST TO ORIGINATE (CTO) In 2015, the total loan production expenses for a company—commissions, compensation, occupancy, equipment and other production expenses and corporate allocation—was approximately $7,000 per loan, according to the Mortgage Bankers Association (MBA). Five years ago, the cost was $5,600— $1,400 less per loan.

There is no doubt that it is increasingly expensive to originate a mortgage loan in a world of new regulations and fickle consumers.

As hiring sales talent becomes more expensive, the CTO is not likely to decrease, and if it does, the drop will be minimal.

With a majority of the CTO driven by personnel costs, sales organizations will be forced to redesign their hiring approach.

3. SALES PRODUCTIVITY A key measurement of sales productivity is the number of loans generated per originator. In 2015, the MBA reported that an average mortgage originator generated 2.8 units in production. Surprisingly, with all the innovations our industry has undergone, this number has not really changed that much in 10 years.

Of course, there are firms with better results in their production per originator. But the fact is that the millions of dollars invested in technology including CRM and LOS systems have not greatly improved productivity performance.

What are the superior mortgage companies doing to generate better efficiency numbers? Is it unique technology, a lower pricing policy or something else? Practically speaking, top mortgage banking firms follow a competitive sales strategy and do not lead in technology investment.

The difference is that superior firms have implemented structured hiring and development processes for talent management. These companies understand that nothing happens unless their front-line sales people deliver an outstanding customer experience. No machine can make another person feel listened to, understood and cared for.

The bottom line is that companies with better sales productivity have the right talent in the right positions and have structure in their sales process. These companies recognize that selling requires professional skills that not everyone has.

All this translates into hiring smart and developing originators to outsell their competitors.

Hiring smart is all about recruiting sales professionals who can find, educate, and influence borrowers and referral sourc-

By Patricia “With a majority ofM. Sherlock the Cost to Originate (CTO) driven by personnel costs, sales organizations will be forced to redesign their hiring approach.”

es. The order-taker era is over in mortgage banking because these individuals are simply not productive enough to warrant continued company investment.

Order-takers’ low productivity and how they impact the operation side of the business by clogging the back office with poorly qualified loans won’t be tolerated anymore.

The shrinking pie marketplace—where products are relatively the same and investors’ requirements more demanding— necessitates that companies hire sales talent who can generate new business and adopt more sophisticated recruiting practices.

IMPACT OF TECHNOLOGY ON RECRUITING

Finding quality sales professionals will cause a shift in how a mortgage company looks for talent; how they determine who The what following article is a organization chapter from Mortgage they will hire; and ultimately the sales will Professional Handbook. It is reprinted w look like.

To find Individuals with the talent and ability to prospect and engage new customers, companies will need to conduct a wider search across non-mortgage industries and educational institutions. The mortgage industry’s emphasis on mortgage experience will be replaced simply because the current sales force is retiring and there will not be enough experienced originators to fill the need of a growing sales organization.

A broader search or casting a wider net will require a change in the recruiting, screening and interviewing process.

Many companies are already beginning to engage specialist recruiters to fill positions—a trend that will continue. Relying on field managers to be the primary source of originators might have worked when the industry did not need quality originators, but it will not work now.

Successful recruiting is not a part-time function delivered by field managers who are involved with so many other activities, including generating their own production. There is not enough time in the day to expect that such a critical function as hiring can be done effectively by producing managers. Using staffing agencies as a supplement to recruiting efforts works on a selective basis, but not as primary driver of a company’s talent strategy.

SO WHAT SHOULD RECRUITING LOOK LIKE?

The solution lies in a company’s staffing internal hiring specialists who are supported by digital technology with field managers involved in the interviewing and decision process when selecting a candidate. With a more dedicated process, a digital hiring model is needed to find and screen because the candidate pool will need to expand to include individuals with no prior mortgage industry experience.

Summer 2016 - PIPELINE 43

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SALES RECRUITING 2020

Sales Recruiting 20

Hiring Right in the N of Mortgage Originat “The mortgage Local field managers might know who they compete with today in their respective markets, but they will not know the non-experienced individuals that may be a match for mortgage origination. Likewise, the search for non-experienced individuals is simply beyond the scope of the local manager’s expertise.

The new universe of potential candidates will be large and require an automated method to filter out those who are not a match for selling.

I would argue that the entire hiring process—from resume to the interview—will become more digital: n The paper resume has already been replaced with LinkedIn profiles that reflect individual experiences and abilities. n A recruiting specialist will tap into a collection of data regarding a candidate before making an initial contact. n Facebook and Twitter provide social profiles that give insight as to whether the candidate is a good fit. n A lack of candidate profile information will also be a glaring sign that the candidate is deficient in social media skills and not appropriate for a Selling 2.0 world. n Finally, big data will touch all parts of the interviewing process and data analytics will be used by recruiters to discover which passive candidates are better to approach than others.

The next change in the screening process is in how the interview sequence is conducted. The first-round phone interview will be replaced with the more high-tech video interview.

Skype-like products with web-cam capabilities have improved dramatically and will be used on the recruiting side of the hiring equation to conduct interviews and to evaluate selling talent. Video interview systems can be programmed as one-way videos where the candidates answer a specific set of questions that the recruiter can then screen on an on-demand basis. This will be especially helpful screening large pools of candidates.

Another part of the recruiting process that will change is a wider usage of algorithms or assessments to predict candidate success. Assessments, while not new, will become a critical hiring component for all mortgage companies hiring that want to be successful in their candidate selections.

THE VALUE OF ALGORITHMS IN HIRING PROCESS

In the old hiring models, a field manager knew what was needed for an origination position because he or she was probably also a top producer. The manager may even have had a track record of personal successful sales performance while experiencing high turnover at the branch. But going forward, to be profitable, the combination of poor hiring and high employee churn will not work.

In a recent Harvard Business Review article, authors Kuncel, Ones and Klieger, conducted extensive research on decisionmaking in the hiring progress. They concluded that when professional managers assess candidates, “85% to 97% will say that they rely on some degree of intuition or a mental synthesis of information. Many managers clearly believe they can make the best decision of the information from the candidate by

industry’s emphasis on mortgage experience will be replaced simply because the current sales force is retiring and there will not be enough experienced originators to fill the need of a growing sales organization.”

looking into the candidate’s eyes

By Patricia M. Sherlock with a veteran’s accumulated knowledge. As scientists will tell us, human judgment alone cannot be solely counted on because humans can easily be distracted by their emotional connection with a candidate. “ Moreover, the authors also found that a simple equation (algorithms) outperforms human decisions by at least 25%. “This effect holds in any situation with a large number of candidates on whether the job is on the front line, in middle management and even at corporate positions. This doesn’t mean that managers should not be involved in the hiring process, but it does indicate that when it comes to evaluating talent they can be easily fooled and the need for objective evaluation of the individual is needed.”

WHICH PERSONALITY CHARACTERISTICS PREDICT SUCCESS

As a former sales executive in mortgage banking, my interest in improving sales selection is rooted in my own experience in hiring candidates who had great resumes, worked at brand name companies and interviewed well, but poorlyProfessional Handbook. It is reprinted with The following article is a performed chapter from Mortgage in the position. I always believed that there must be a better way and there is: validated pre-hire assessments.

In 1999, my consulting firm completed the first nationwide analysis of personal behaviors of top producers with the support of the MBA. From that initial research, I partnered with industrial psychologists and performed studies on the personality characteristics of originators to determine what predicted mortgage origination success in retail, third-party and inside sales.

We analyzed top, middle and low performers. These studies included production unit analysis; production performance numbers and manager reviews of individual sales people. We have reviewed this data in good and bad markets and we have found over 15 years that there are a set of personality traits that are predictive of mortgage sales success.

The nine personality traits and their definitions are as follows: n Social—Enjoys clients/customer contact n Optimistic—Weathers adversity well n Assertive—Possesses a confident sales presence n Self-reliant—Takes charge and gets things done n Low expressiveness—Reserved n Positive about people—Balanced outlook regarding people and their intentions

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SALES RECRUITING 2020

n Energetic—High enthusiasm, hard work, visible effort n Follows through—Completes tasks and follows through on commitments n Resilient—Able to handle criticism and rejection well The nine personality traits are a combination of relationship-building skills and personal drive attributes. Each personality trait is weighted, which determines its ranking. A candidate answers a specially designed web-based behavioral survey and the interviewer receives a report containing a determination on whether the candidate should move further in the interview process.

Six of the personality traits (social, optimistic, assertive, energetic, follows through and resilient) are found in most professional sales positions in many industries. The three remaining traits (self-reliant, low expressiveness and positive about people) are distinctive to mortgage sales positions.

Using a validated assessment helps companies eliminate the least-suitable applicants and leaves a smaller, better-qualified pool of candidates to undergo the more costly personalized aspects of the hiring process.

The impact of removing what would be a company’s lowest performers upfront can be seen by the increased use of pre-hire assessments by best-in-class companies. Aberdeen Group, a well-known human capital management firm, estimates that pre-hire assessments are used by 45% of best-inclass organizations.

GEN Y AND THE CHANGING WORKFORCE

While the set of personality traits for mortgage originators has remained fairly consistent over the years, the anticipated retirement of Baby Boomers and the hiring of a younger generation will impact the selection process. The generational differences could change the profile of a successful originator.

It might even change how the sales work will be defined and compensated.

In an extensive review by Assess Systems, our company’s inBy Patricia M. Sherlock dustrial psychologists partners, more than 500,000 assessments over a decade from a broad range of industries, not just mortgage lending, the research is showing critical differences in some areas and similarities in others in the aggregate for successful sales personnel.

In their white paper, “Personality Differences Among Generations,” Assess Systems concluded that “… certain preconceived notions about Gen Y have been disproved by assessment data. As an example, the most significant

Sales Recruiting 2020 Hiring Right in the New World of Mortgage Origination “Using a validated assessment helps companies eliminate the least-suitable applicants and leaves a smaller, better-qualified pool of candidates to undergo the more costly personalized aspects of the hiring process.”

46 PIPELINE - Summer 2016

declines between generations are: cultural conformity (adhering to organizational values); positive about people (trusting toward people); realistic thinking (practical vs. being imaginative); serious minded (reasonable and pragmatic) and self-reliance (self-starter). The upward trends for Gen Y are structured thinking; detail orientation; work organization and sociability (comfortable in social situations).

These work-related personality trait differences between generations are statistically significant and meaningful. This in turn will translate into potential difficulty in mortgage lending of attracting Gen Y to the origination positions unless the present job responsibilities are redesigned. In the future, a “lone ranger” type may not be right match for the new world of origination.

NEXT BIG TREND: DETERMINING CULTURAL FIT

After an objective evaluation of sales talent ability, the determination of whether an individual is a cultural fit for a company will become a more critical part of the interview process.

Today an originator’s production numbers are given the most weight in a hiring decision. Culture fit is not typically screened for or evaluated. That will change as sales talent is increasingly examined from a risk perspective and reputation standpoint.

With more companies recognizing how critical trust and integrity matter with customers, having employees that match to a firm’s core values and collective behaviors that make up an organization will be a more important factor in the selection process. A cultural fit analysis will be part of a company’s evaluation of sales candidates.

A good cultural fit translates into engaged employees. The value of engaged employees has been well-documented and referenced in a variety of studies and books including Marcus Buckingham’s First, Break All the Rules: What the World’s Greatest Managers Do Differently.

In a recent Harvard Business Review article, Kate Bouton, said that “employees who fit well with their organization, coworkers and superior had greater job satisfaction, were more likely to remain with their organization and showed superior job performance.” This is no surprise to managers who have had a sales candidate who interviewed well but didn’t fit in with the company’s culture.

It has been estimated than 84% of terminations are due to a lack of culture fit and not a lack of skills. It is clear that cultural fit matters in evaluating candidates. An argument can be made that it is even more important than sales talent.

To evaluate cultural fit, specific behavioral questions have been asked regarding compatibility in the interview process. In 2020, new technology and big data will be used to help assess cultural fit.

A recent New York Times article reported that “a group of researchers have been able to predict outcomes solely on outline behaviors.” What was interesting about the study was their model was 92% accurate, even better than an individual’s colleague or even the person’s own self-assessment, and it was based on each subject’s Facebook’s “Likes.”

SALES RECRUITING 2020

Sales Recruiting 20

Hiring Right in the N “With more companies of Mortgage Originat

The reality today is that everybody leaves a digital footprint from their preferred social media preferred platforms, web searches, purchases and emails. These footprints will be interpreted and analyzed in the not-too-distant future, and they will identify those who fit an organization and those who do not. Job interviews will be a thing of the past as the only and primary screening method of the candidate.

NEXT GREAT LEAP: REALISTIC JOB PREVIEW SIMULATIONS

As the mortgage banking’s aging sales force begins to exit the business, a veteran originator’s book of business will no longer be a valid industry measuring stick. Substantial openings will require recruiting departments to articulate the pros and cons of the originator position to candidates with no mortgage experience. In order to do this, companies will be using what is known as a realistic job preview (RJP).

RJPs have been around for years. Industrial companies first used them to hire employees for manufacturing jobs. More recently, Home Depot and PetSmart have also used RJPs for their available positions. In mortgage banking, some call centers have added them to their hiring and screening process, but distributed sales channels have not.

In 2020, rookie hiring will gain speed, and the need to hire a large number of inexperienced candidates and train them will push hiring managers to use RJP simulations.

In his article on “Job Simulations for Selecting Employees,” Dr. Charles Handler commented that “technology has provided a serious upgrade to simulations. It is now possible to re-create a great deal of work environments; performance on simulations can be evaluated in an automated manner; and simulations can be given remotely from anywhere.” Handler also believes that the future lies in gaming technology.

Hiring inexperienced candidates and developing them will be a risky and large investment for a mortgage sales organization, requiring them to reduce the chances of a wrong hire.

Showing a candidate what an originator’s typical eight-hour day looks like is a smart way to eliminate those that are not really interested in the position. RJP simulation gives the candidate an opportunity to decide for themselves if the job is right for them and if they like the job’s responsibilities. On the other hand, the employer can use the information to evaluate whether the candidate is a fit for the sales position.

FINAL THOUGHTS

The year 2020 will be quickly upon us. Dramatic changes will occur, not just in mortgage banking but all industries, stemming from the simple fact that the United States is in the midst of a tectonic demographic shift in the workforce from the aging population of Baby Boomers to a new and different generation.

Add to this an ever-evolving consumer buying journey, and sellers will be faced with monumental choices in how to effectively conduct their business. The leading issue will be talent selection and development as a new generation of employees and buyers come to fruition.

recognizing how critical trust and integrity matter with customers, having employees that match to a firm’s core values and collective behaviors that make up an organization will be a more important factor in the selection process.”

It is clear from our research

By Patricia M. Sherlock data that the Gen Y workplace personality is significantly different from previous generations, raising major questions about what the mortgage sales work and profession will look like. Will the traditional originator who is expected to self-source customers and referral sources even exist in the new world?

Companies will have to answer this question first before designing a recruitment strategy.

Some companies believe the originator position can be eliminated by technology. In my view, these firms are over-valuing what technology can accomplish.

The history of business has shown the fallacy of this thinking. At different points in time, computers were forecast to replace the need for salespeople and that has just not happened.

In fact, sales positions are still a top U.S. occupation and will be so in 2020.

While mortgage sales staffs will be lean in the future to match a shrinking-pie environment, it is still a business that will be relationship-driven. Human interaction is needed in a loan process to assist in reducing an increasingly painful experience in financing a home purchase. The quality of a salesperThe following article is a chapter from Mortgage Professional Handbook. It is reprinted with son, however, will need to be better in this new marketplace, because the customer is demanding knowledgeable experts with relationship skills.

As a result, a quality hiring strategy will replace mortgage banking’s long track record of quantity hiring. In this new period of origination, a revolution will occur in talent acquisition.

The interview will not be the central focal point of whether the candidate can originate and gut decisions will no longer be tolerated by companies.

Instead, mortgage recruitment will move into the 21st century with a more technology savvy approach where science and algorithms will be used to identify the best talent that fits culturally and delivers an exceptional customer experience.

Companies that fail to take advantage of more advanced techniques from assessments to simulations will be left behind in the race to gain market share. The war for market share will be won by those companies that hire the right people and develop them in 2020.

Patricia M. Sherlock is president of QFS Sales Solutions, a sales improvement firm in Medford, New Jersey. She can be contacted at psherlock@qfsconsulting.com.

Summer 2016 - PIPELINE 47

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GENERATIONAL PERSPECTIVE

Generational Perspective A Key to Successful Recruiting and Hiring, and a Collaborative Workforce

By Tom Burton

Phil Gwoke began his presentation on intergenerational relationships with a story about interviewing a job candidate. On paper, Gwoke said, she looked like an outstanding match for his company, Bridgeworks, dedicated to studying generation differences. n “Then we ‘stalked’ her on Facebook and Twitter,” said Gowke, a generational expert for Bridgeworks. She checked out there, too. She was a blogger, counted many followers, obviously knew social media. Gwoke concluded that she was sharp, someone Bridgeworks wanted to meet with.

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GENERATIONAL PERSPECTIVE

To communicate “generationally,” we must break down barriers and avoid making stereotypes about others: “Don’t let a wall go up,” Gwoke said.

UNDERSTANDING DIFFERENCES IN PERSPECTIVE

In the workplace, and in particular in the world of finance (including mortgage), understanding differences in generational perspective is tantamount, Gwoke said.

“Ten thousand Baby Boomers turn 65 on a daily basis,” he said, noting that it did not mean “retirement” necessarily, since many work part time past retireGenerational expert Phil Gwoke discusses recruiting and retaining employees from a ment age. generational perspective at the 2016 ACUMA workshop in Tempe, Arizona.

“On the other end of the spectrum, you have Millennials, who “You can’t judge a book by its cover,” he said, “but the first by 2020 will make up 50 percent of the workforce in America.” thing I noted was a bright blue wisp of hair dangling in her To older workers, that statistic can be stunning: In four face.” That observation aside, the job candidate was a “dynayears, half the workforce will consist of those born in 1980 and mo,” Gwoke said; everything about her checked out. later. But what we must avoid, Gwoke warned, are the stereoBut he still couldn’t get that blue hair out of his mind. The types of what each generation, and in particular Millennials, next time he talked with his mom, “68 years young, vibrant represent. Better that we talk about the influences, traits and with an active lifestyle” but “old school,” he decided to ask her values of each generation to understand the differences. (See what she thought about the woman with blue hair.

“Communicating Across Generations” charts, Pages 52-53.)

“I think it’s just wonderful,” his mom replied.

This is by necessity a generalization and does not speak to Surprised, Gwoke asked her why. individual experiences, Gwoke said, but it is useful in express“It’s about time you hired one of us senior citizens,” she ing what sociological research has determined to be valid. said.

Introducing the influences, traits and values, Gwoke noted And that, Gwoke said, is a great example of generational five generations of current and future workers: perspective. n Traditionalists (born before 1946) comprise only 2 perTo communicate effectively in the workplace, we need to cent of the workforce. They have been influenced by such understand that each generation has a different perspective on things as the Great Depression and War, especially World life that affects the way they do their job—and more imporWar Two. Greatly influences by the military, they show a tantly—how they relate to others in the workplace, especially “top down” style of leadership and exhibit loyalty. That those from other generations. leadership style was apparent in the 1950s toprated TV show, “Father Knows Best,” Gwoke noted.

And loyalty, or more accurately here, brand loyalty, was demonstrated in purchases including automobiles: “We’re a Ford family, son,” for example.

“To communicate effectively in the workplace, we need to understand that each generation has a different perspective on life that affects the way they do their job.”

Phil Gwoke

50 PIPELINE - Summer 2016

n Baby Boomers (1946-1964) enjoyed a traditional family setting whose parents wanted them to have a better life. TV was a big influence growing up, and their generation was optimistic, idealistic and competitive. The competitiveness had a down side on family life, however, as this generation introduced the 50- or 60-hour work week as a way to get ahead. Boomers also talked less to their children about how they should live their lives, including finances—the importance of

GENERATIONAL PERSPECTIVE

SIDEBAR

“No generation lives in a vacuum.

We’re all influenced by the generations before us.”

Roundtable:

Attracting Millennials savings, budgeting, etc., which was to have a great impact on future generations. n Generation X (1965-1979) is a much smaller group than the 80 million Boomers or the subsequent 86 million Millennials, mainly due to the arrival of birth control. This generation also saw their parents become two wage-earner families and grew up as cable TV, including MTV and CN, exploded onto the scene: By age 21, the average Gen Xer had watched 23,000 hours of television, noted Gwoke, a Gen Xer himself. They grew up with the Enron scandal, the space shuttle Challenger disaster and the O.J. Simpson trial. They are independent, resourceful and skeptical. As a result, this generation grew up with lowered expectations about what they could achieve.

As part of generational expert Phil Gwoke’s presentation at ACUMA’s 2016 workshops, attendees worked in smaller groups to put Gwoke’s message to work: Based on generational perspectives and discussing what shaped each generation, how would your organization more effectively recruit and hire Millennials? Here are some of their ideas. n Create “collaboration areas” where em-

ployees can explore new ideas. n Allow for staff to work remotely and offer flexible hours when appropriate.

n Millennials (1980-1995) already number 82 million, and when immigrants are included, likely increase to about 86 million. They are the first truly multicultural generation, having interacted with all races and ethnicities. They are diverse, tech savvy and collaborative. They also expect a degree of independence in the workplace: Instead of “Just do it,” Millennials ask, “Why should we do it?” But they have also not been taught about handling finances, a carryover from earlier generations, so they are not generally interested in finance-related jobs, including mortgage. “They also have a PR problem: lack of respect from the media,” Gwoke said. But in 2016 they became the largest segment of homebuyers and by 2018 will outpace Boomer earnings, he noted.

n Offer an on-site fitness center.

n Gen Edge (1996-2010) are just beginning to reach adulthood. The impact of this first post-Internet generation has yet to be felt—but it will.

n Encourage staff to become involved in work discussions; make them part of the conversation.

“To communicate generationally, you need to understand the differences in perspective.”

n Set up a Starbucks table area, stocked with drinks, snacks and fruits, where staff can relax and chat. n Allow casual dress for employees not required to be in business attire. n Promote your “unique workplace,” showing Millennials you are collaborative, cooperative and open to suggestions. n Make goals and training programs tied to some kind of new process. For example, staff identifying “red flags” could receive time off or another non-monetary reward.

n When recruiting, include existing staff in the interview process. n Create a success path so Millennials can monitor their progress to qualify for career development. n Adopt the Platinum Rule: Do unto others as they would have done to themselves.

Summer 2016 - PIPELINE 51

GENERATIONAL PERSPECTIVE

SHAPING A GENERATION

“No generation lives in a vacuum,” Gwoke said. “We’re all influenced by the generations before us.”

Each generation is shaped by events that occur in the formative, or roughly teenage, years, he said. These events help determine who you are, want you want, your take on religion, politics, etc.

For example, if you ask a Baby Boomer what “NASA” means to them, many will recall the successful culmination of the space race—the first lunar landing in 1969 when American astronaut Neil Armstrong proclaimed, “One small step for man, one great leap for mankind.” The event helped shape the idealism and optimism of a generation; it said to them, “Anything is possible.”

By contrast, if you ask a Millennial about NASA, they will most likely recall the Challenger explosion that took the lives

CHART 1

Reprinted with permission from Bridgeworks. Learn more at www.generations.com

52 PIPELINE - Summer 2016

GENERATIONAL PERSPECTIVE

of an entire crew, including a schoolteacher. Many Millennials watched the tragic event live on television in their classrooms.

For them it was a sign of pessimism and doubt, and contributed the shaping their generation.

“To communicate generationally, you need to understand the differences in perspective,” Gwoke said.

Noting the events that shaped a generation, as well as understanding how they differ in their perspective is a key to

building a successful workplace model, and to recruiting and hiring the best candidates for your team. (See related article, “Roundtable Discussion, on Page 51.)

Tom Burton is a freelance writer and editor who worked in the credit union industry for 10 years. Prior to that, he was an editor and manager at a daily newspaper. He’s also a Baby Boomer.

CHART 2

Reprinted with permission from Bridgeworks. Learn more at www.generations.com

Summer 2016 - PIPELINE 53

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THE TOP 300

Take Time to Savor Last Year’s Numbers Before you take a look at the first quarter of 2016 please take a moment to pause and savor 2015. Last year, credit unions had their best year yet with more than $125 billion in loans granted. The total surpassed the record we broke in 2012.

OK, if truth be told, credit unions closed $124 billion in loans in 2012, so although 2015 showed a higher volume, one could argue that it was not by much.

So why should you savor 2015? Based on the Mortgage Bankers Association’s assessment of Total U.S. Residential Originations, the total market in 2012 was more than $2 trillion. The total for 2015 was just over $1.6 trillion.

Smaller market, more CU loans. Something to savor.

As you’ll see, 2016 is off to a slow start. Most credit unions reported a very slow January and February. It didn’t help that the fundings which did happen had to comply with TRID. The good news is by the end of the first quarter things were picking up.

The second quarter was strong but we won’t have the final numbers until early September. Enter Brexit and lower rates. Just when you thought refinances were done. Here we go again!

Keep your eye on the purchase loans, they remain the key to building marketshare, but it looks like we’ll enjoy a summer wave of refinances, too.

TOP 300 FIRST MORTGAGE-GRANTING CU MARKET SHARE AS OF MARCH 31, 2016

Total Assets

Top 300 1st Mortgages Originated CUs

21,094,302,884

96,937

230,017,747,245

7,794,812,282

721,166,413,046

All Originating CUs (2,807 CUs)*

26,681,518,068

142,331

328,858,911,779

9,818,893,167

1,190,697,171,398

79.1

68.1

69.9

79.4

60.6

Top 300 Share

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

*CUs who granted $10,000 or more 01/16 - 03/16

TOP 300 FIRST MORTGAGE-GRANTING CU AS OF MAR. 31, 2016

Name of Rank Credit Union 1 VA Navy

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages $2,314,088,505

9,294

$24,999,630,307

$1,047,435,919

Total Assets $75,166,325,715

2 VA Pentagon

$707,025,367

2,025

$11,270,197,549

$343,589,901

$19,920,263,320

3 NC State Employees’

$675,503,281

4,333

$14,383,062,929

$0

$33,322,462,934

4 NY Bethpage

$419,255,374

924

$2,727,964,482

$144,627,220

$6,646,113,622

5 MI Lake Michigan

$418,412,414

3,332

$2,339,301,899

$242,137,009

$4,372,704,902

6 CA First Tech

$414,854,493

1,119

$3,598,688,097

$181,540,618

$8,706,752,957

7 WA BECU

$382,596,495

1,334

$4,022,500,655

$152,282,026

$15,041,389,190

8 CA Kinecta

$365,732,415

828

$1,811,542,152

$273,551,274

$3,929,302,841

9 TX Security Service

$278,910,560

1,379

$1,802,558,590

$233,516,749

$9,115,249,666

10 CA Star One

$272,770,022

524

$2,703,700,293

$0

$8,051,676,977

11 CA Patelco

$247,123,827

484

$1,941,557,750

$8,743,668

$5,064,613,079

12 CA Logix

$246,604,576

551

$2,427,919,535

$29,103,569

$4,476,177,283

13 AK Alaska USA

$236,235,464

855

$645,291,782

$213,323,894

$6,378,066,276

Summer 2016 - PIPELINE 55

THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages $235,965,914

15 CA SchoolsFirst 16 UT America First 17 MA Digital

$202,789,424

639

$2,257,934,774

$69,497,627

$7,135,628,811

18 OR OnPoint Community

$202,770,028

1,868

$1,195,130,098

$53,895,292

$4,054,100,119

19 CA San Diego County

$192,945,000

462

$3,354,290,888

$18,254,069

$7,441,864,114

20 CA The Golden 1

$191,642,084

720

$2,122,953,629

$12,713,931

$10,097,026,599

21 ID Idaho Central

$188,950,094

1,150

$831,147,978

$142,017,984

$2,425,497,012

22 UT Mountain America

$168,851,771

1,612

$1,625,993,367

$78,691,926

$5,401,784,841

23 WI Landmark

$158,778,744

938

$876,101,688

$86,145,373

$3,007,520,500

24 TX Randolph-Brooks

$154,389,792

948

$2,161,080,293

$4,839,956

$7,127,206,628

25 TX University

$149,131,096

527

$767,785,548

$85,521,186

$2,047,285,446

26 CO Ent

$145,894,683

732

$1,843,974,654

$25,746,701

$4,379,530,139

27 WI Summit

$142,755,610

835

$1,131,226,541

$61,202,987

$2,485,708,041

28 MO CommunityAmerica

$130,861,365

711

$579,903,428

$114,938,069

$2,258,914,195

29 IL BCU

$125,920,712

1,003

$962,032,534

$82,905,591

$2,543,139,794

30 IL Alliant

$119,851,556

253

$3,141,107,901

$11,743,555

$8,918,500,196

31 WI University Of Wisconsin

$119,665,616

658

$424,316,299

$67,593,000

$2,169,445,238

32 DC Bank-Fund Staff

$117,068,669

248

$1,963,953,657

$6,621,217

$4,336,467,106

33 WI Community First

$115,297,536

703

$1,486,487,363

$8,678,300

$2,414,134,081

34 CA Redwood

$115,026,600

322

$1,166,296,260

$36,386,350

$2,945,159,560

35 NY Teachers

$111,155,794

155

$1,178,771,278

$36,504,291

$5,357,845,736

36 CA Provident

$109,809,175

252

$870,795,012

$57,540,216

$2,159,310,440

37 TX American Airlines

$109,565,782

389

$1,901,802,126

$0

$6,067,286,908

38 CA Premier America

$109,291,622

92

$1,206,672,412

$3,566,750

$2,220,460,108

39 IA Veridian

$104,695,292

513

$832,005,363

$28,623,834

$2,952,163,809

40 IL CEFCU

$102,948,209

496

$2,272,418,661

$0

$5,536,928,359

41 OH Wright-Patt

$100,869,447

822

$544,307,844

$31,364,415

$3,252,402,691

42 GA Delta Community

$99,216,313

479

$1,653,931,249

$0

$5,157,328,055

43 AZ Desert Schools

$98,602,081

561

$600,328,395

$62,755,063

$3,991,511,649

44 NY United Nations

$98,152,495

241

$1,358,904,479

$14,274,249

$4,448,344,785

45 IA University Of Iowa Community

$98,118,465

439

$1,562,970,419

$72,977,424

$3,349,122,285

46 CA Mission

$97,825,450

252

$920,679,152

$24,805,534

$2,962,859,240

47 WI Royal

$97,732,730

561

$737,058,830

$42,688,764

$1,788,687,141

48 FL Suncoast

$96,944,323

638

$2,025,687,064

$514,400

$7,328,566,505

49 TN Eastman

$96,524,164

857

$1,721,009,413

$69,318

$3,394,265,576

50 NY State Employees

$90,702,489

611

$748,179,049

$61,323,826

$3,153,983,012

51 CA Technology

$90,269,670

132

$906,529,131

$0

$2,117,659,302

52 CA SAFE

$90,216,230

295

$692,499,149

$38,733,080

$2,412,934,325

53 CA Chevron

$89,314,935

251

$1,935,066,759

$0

$2,929,306,082

54 NY CAP COM

$83,321,527

525

$665,591,426

$35,585,454

$1,290,259,693

56 PIPELINE - Summer 2016

786

$665,047,617

$229,882,950

744

$213,102,635

2,324

Total Assets

14 CO Elevations

$160,747,225

$1,645,914,636

$2,643,223,736

$48,814,621

$12,225,725,293

$908,006,582

$106,086,247

$7,549,755,426

THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

55 NC Local Government

$83,219,303

582

$443,234,054

56 FL VyStar

$82,839,867

573

57 NC Coastal

$82,173,106

334

58 CA Stanford

$80,299,150

59 MD SECU of Maryland

$80,080,871

60 CA Orange County’s

Total Assets

$47,277,008

$1,691,562,965

$1,958,385,170

$7,839,806

$6,110,727,864

$758,786,855

$48,381,718

$2,654,067,705

125

$852,743,364

$11,850,499

$1,970,486,330

370

$1,204,871,799

$11,201,000

$3,041,637,386

$78,690,774

242

$514,502,432

$36,140,027

$1,383,733,532

61 CA Unify Financial

$78,158,056

181

$742,417,121

$1,064,500

$2,241,890,646

62 CA Financial Partners

$77,743,102

186

$456,853,407

$45,713,758

$1,125,614,684

63 OR First Community

$76,216,079

521

$314,076,187

$11,299,007

$919,091,229

64 FL GTE Financial

$74,687,891

322

$375,692,330

$36,589,150

$1,825,159,638

65 CA Wescom

$74,414,414

224

$900,093,283

$36,964,270

$3,314,395,745

66 CA California

$73,610,214

163

$540,207,272

$26,300,695

$1,530,065,772

67 VT New England

$73,350,150

366

$554,599,256

$42,098,015

$1,138,576,548

68 CO Bellco

$72,139,253

162

$921,747,377

$27,798,437

$3,681,969,369

69 AZ OneAZ

$70,126,214

362

$560,078,342

$33,809,750

$1,845,774,969

70 UT Utah Community

$69,317,770

366

$226,253,200

$49,734,941

$1,098,676,120

71 WA Numerica

$67,543,452

245

$438,822,191

$11,328,806

$1,662,202,166

72 TX Advancial

$66,328,527

184

$450,903,909

$36,393,412

$1,295,202,600

73 PA Members 1st

$66,247,727

317

$623,624,630

$22,582,184

$3,152,317,328

74 NJ Affinity

$65,435,729

311

$1,354,112,321

$0

$2,463,918,413

75 MI United

$65,134,467

315

$796,473,747

$18,414,963

$2,040,176,974

76 WA Whatcom Educational

$65,128,528

254

$589,042,968

$8,506,301

$1,263,330,534

77 TX TDECU

$64,880,273

445

$775,937,704

$31,471,817

$2,946,065,085

78 NY Hudson Valley

$63,762,308

286

$715,151,337

$36,006,216

$4,437,375,518

79 NM Nusenda

$63,412,804

187

$469,263,710

$21,632,444

$1,749,193,815

80 CA North Island

$62,908,957

91

$496,638,073

$10,699,981

$1,244,636,496

81 MN Affinity Plus

$61,414,087

434

$439,194,328

$28,070,531

$1,844,176,686

82 MI DFCU Financial

$60,630,063

371

$619,199,771

$35,862,817

$4,215,747,227

83 UT Goldenwest

$60,528,046

308

$326,695,496

$37,737,992

$1,178,751,305

84 MA Jeanne D’Arc

$60,223,084

166

$718,687,815

$18,205,607

$1,197,755,748

85 RI Navigant

$59,908,674

247

$932,701,373

$8,602,150

$1,618,467,235

86 CA NuVision

$59,288,237

150

$525,924,455

$29,250,289

$1,418,495,114

87 NV One Nevada

$59,262,315

291

$148,156,872

$55,775,818

$796,075,540

88 VA Apple

$59,041,418

165

$821,768,000

$19,256,856

$2,157,070,535

89 PA Citadel

$58,700,381

197

$1,141,129,302

$7,458,902

$2,564,953,041

90 MN Wings Financial

$58,419,597

259

$996,876,104

$10,277,586

$4,370,863,747

91 WA Spokane Teachers

$57,661,339

261

$927,748,585

$3,042,969

$2,264,899,726

92 IN Evansville Teachers

$56,825,025

498

$334,899,607

$65,981,190

$1,264,425,185

93 CA Partners

$56,181,264

169

$456,500,701

$24,100,209

$1,460,160,302

94 MA Metro

$55,900,409

182

$483,357,620

$30,996,895

$1,508,702,791

95 RI Pawtucket

$55,715,612

307

$1,113,413,076

$2,917,773

$1,837,338,720

Summer 2016 - PIPELINE 57

THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

96 FL Fairwinds

$55,690,926

344

97 TX GECU

$55,478,911

98 NY Visions

$55,201,875

99 OR Advantis 100 MN TruStone Financial

Total Assets

$660,114,331

$26,952,933

$1,983,017,916

554

$420,618,902

$27,120,262

$2,445,817,145

295

$1,242,744,480

$1,940,550

$3,538,410,658

$53,951,496

216

$337,577,090

$38,355,293

$1,259,604,234

$53,161,428

251

$331,496,707

$34,916,087

$1,093,721,922

101 VA Langley

$53,146,866

291

$372,866,346

$9,460,990

$2,205,204,619

102 CA Xceed Financial

$53,133,250

122

$360,330,880

$52,427,041

$947,691,837

103 IN Beacon

$53,059,092

168

$659,345,818

$0

$1,159,219,542

104 VA Virginia

$52,899,546

289

$642,208,330

$16,500,681

$3,046,787,563

105 WI Westconsin

$51,725,083

394

$379,357,539

$33,071,685

$1,030,076,446

106 WI Altra

$50,759,361

343

$461,288,753

$25,899,160

$1,186,443,176

107 MI Michigan State University

$50,461,553

331

$947,232,569

$230,000

$3,232,456,303

108 PA TruMark Financial

$49,759,463

170

$535,151,170

$19,485,878

$1,742,087,531

109 IN Elements Financial

$47,298,028

232

$427,324,742

$13,054,231

$1,316,352,081

110 CO Premier Members

$46,952,531

135

$243,559,367

$1,020,286

$889,446,700

111 IN Forum

$46,886,455

236

$277,983,340

$30,233,686

$1,161,426,292

112 CO Public Service

$46,716,274

184

$204,287,497

$26,761,902

$1,736,609,117

113 IA Dupaco Community

$46,401,077

306

$310,081,250

$25,811,350

$1,377,395,417

114 IA Collins Community

$45,566,254

303

$374,729,597

$17,612,622

$936,379,161

115 OH General Electric

$45,396,334

189

$476,794,474

$575,600

$2,383,557,424

116 CA California Coast

$45,224,834

164

$647,446,781

$14,577,983

$2,094,260,379

117 FL Space Coast

$45,203,288

247

$812,754,288

$15,880,568

$3,709,669,815

118 WI Covantage

$45,035,490

439

$601,940,736

$3,343,765

$1,320,396,266

119 WI Fox Communities

$43,633,115

333

$693,748,044

$2,952,979

$1,169,212,520

120 IL Great Lakes

$43,294,882

101

$180,942,699

$10,605,772

$739,327,704

121 MD NASA

$42,970,669

116

$487,594,127

$8,680,584

$1,858,650,182

122 NY ESL

$42,679,894

224

$414,063,516

$21,356,502

$5,778,706,115

123 WI Capital

$42,647,925

319

$508,014,781

$4,990,302

$1,165,548,010

124 CA KeyPoint

$42,483,725

69

$457,730,009

$12,028,522

$1,045,157,612

125 MD Tower

$41,677,192

168

$411,022,602

$22,199,655

$2,873,997,068

126 TX Navy Army Community

$40,782,911

301

$843,188,056

$0

$2,401,864,826

127 IN Teachers

$40,429,804

283

$916,772,649

$768,256

$2,922,785,104

128 SC Family Trust

$40,195,800

279

$138,733,105

$4,569,494

$422,505,562

129 WA Columbia

$39,854,602

156

$376,572,930

$2,540,600

$1,168,494,956

130 WA Salal

$39,461,398

109

$143,686,176

$6,521,000

$454,840,094

131 TN Ascend

$39,058,143

181

$568,820,535

$0

$1,878,772,887

132 PA Pennsylvania State Employees

$39,055,207

425

$837,060,138

$65,550

$4,605,345,501

133 CA Meriwest

$38,786,086

42

$447,306,763

$33,256,200

$1,291,428,414

134 OK Truity

$38,669,989

208

$185,525,302

$32,325,650

$780,646,403

135 CO Air Academy

$38,373,681

188

$170,096,290

$9,611,448

$518,303,407

136 WI Marine

$38,118,927

545

$257,433,793

$12,842,059

$644,628,997

58 PIPELINE - Summer 2016

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THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

Total Assets

137 GA Georgia’s Own

$37,801,467

159

$500,382,842

$2,413,210

$2,115,933,935

138 AL Redstone

$37,718,636

278

$335,954,261

$26,274,974

$4,339,187,532

139 TX Amplify

$37,695,348

106

$217,337,991

$2,912,000

$790,831,554

140 WI Educators

$37,675,852

322

$717,540,261

$1,668,925

$1,660,637,844

141 UT Deseret First

$37,614,009

183

$131,695,972

$27,089,434

$542,206,897

142 SC Sharonview

$37,308,363

230

$549,270,413

$448,070

$1,222,289,504

143 TN ORNL

$37,215,600

277

$524,472,354

$13,725,850

$1,765,533,360

144 WA Gesa

$37,104,073

29

$313,568,405

$21,837,060

$1,672,147,409

145 UT University First

$37,065,021

247

$128,629,099

$13,708,875

$811,103,711

146 FL Campus USA

$37,046,335

237

$402,853,095

$315,900

$1,427,370,963

147 NY Sunmark

$36,855,684

232

$194,557,212

$20,140,569

$512,930,292

148 MS Keesler

$36,852,638

178

$358,563,021

$0

$2,378,406,810

149 NY Nassau Educators

$36,829,499

96

$660,846,254

$14,246,210

$2,449,918,888

150 NJ Polish & Slavic

$36,076,035

138

$796,558,440

$163,261

$1,720,327,972

151 SC South Carolina

$35,598,351

181

$461,072,132

$16,457,909

$1,464,389,960

152 IN 3Rivers

$35,571,712

227

$250,980,873

$26,736,682

$821,183,513

153 MN Central Minnesota

$35,170,144

207

$370,036,119

$18,750,017

$921,661,916

154 MI People Driven

$34,877,092

196

$39,507,283

$0

$248,519,825

155 NY USAlliance

$34,710,403

60

$323,921,545

$1,494,900

$1,150,688,681

156 CA First Entertainment

$34,681,241

83

$396,599,525

$6,192,797

$1,297,347,757

157 CA American First

$34,326,581

87

$220,267,157

$11,685,693

$593,456,689

158 KY L & N

$34,326,493

181

$469,977,091

$2,587,193

$1,035,074,539

159 WI Westby Co-op

$34,135,813

243

$173,734,996

$2,992,043

$428,357,862

160 SC Founders

$34,081,599

633

$674,700,083

$0

$1,919,249,000

161 NH Service

$33,550,660

121

$573,853,942

$0

$2,941,899,825

162 ND Town and Country

$33,447,832

177

$146,805,350

$23,689,043

$383,715,382

163 CA San Francisco Fire

$33,372,193

62

$444,148,294

$8,745,900

$1,158,772,278

164 IN Interra

$33,178,296

131

$329,826,426

$1,546,435

$837,714,919

165 PA Police And Fire

$33,157,147

164

$1,347,809,039

$16,453,897

$4,494,544,609

166 GA Robins Financial

$33,115,418

170

$338,204,074

$7,298,647

$2,179,150,013

167 PA American Heritage

$32,871,436

135

$418,877,247

$33,226,266

$1,690,433,842

168 WA WSECU

$32,647,403

201

$487,560,211

$26,977,482

$2,481,363,417

169 IL Deere Employees

$32,558,084

196

$367,342,698

$10,674,000

$781,302,943

170 CA Travis

$32,204,433

132

$425,917,417

$20,275,419

$2,599,984,671

171 MO First Community

$32,191,801

228

$391,608,435

$16,757,879

$2,181,155,749

172 MA Harvard University Employees

$31,958,050

92

$245,774,866

$14,285,396

$526,128,473

173 OH Superior Credit Union, Inc.

$31,580,643

266

$218,892,942

$33,265,230

$595,935,490

174 CO Westerra

$31,480,850

156

$336,191,434

$28,013,546

$1,372,232,612

175 OR Selco Community

$31,266,292

119

$294,844,062

$0

$1,343,898,379

176 CT American Eagle Financial

$30,745,639

141

$480,554,398

$11,459,256

$1,469,611,410

177 CA SF Police

$30,701,841

60

$332,639,497

$0

$815,837,371

60 PIPELINE - Summer 2016

THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

Total Assets

178 MN Spire

$30,486,088

209

$219,683,567

$8,553,965

$845,717,920

179 OR Unitus Community

$30,293,513

213

$247,317,961

$23,388,171

$1,005,818,297

180 FL Pen Air

$30,118,643

105

$222,784,974

$2,387,562

$1,316,890,324

181 NC Truliant

$29,783,319

197

$483,000,052

$7,441,691

$2,006,653,167

182 NH St. Mary’s Bank

$29,426,421

153

$286,052,716

$22,423,584

$918,427,277

183 TX United Heritage

$29,403,837

153

$317,295,888

$4,660,843

$880,491,577

184 NY Municipal

$29,352,052

116

$663,386,858

$0

$2,448,390,082

185 AL MAX

$29,238,114

75

$224,086,886

$3,957,063

$1,198,909,227

186 NY Self Reliance New York

$29,215,900

43

$701,829,964

$0

$1,187,549,323

187 TX Austin Telco

$29,101,789

140

$331,504,817

$460,555

$1,368,429,916

188 CA Evangelical Christian

$28,835,563

10

$523,557,310

$30,479,747

$919,229,020

189 TN Orion

$28,741,192

85

$203,233,076

$2,027,291

$615,289,840

190 HI Hawaii State

$28,691,046

81

$213,434,435

$19,581,873

$1,426,504,460

191 NY AmeriCU

$28,640,653

263

$487,382,824

$82,049,966

$1,307,941,670

192 WA iQ

$28,483,529

90

$173,899,854

$13,552,148

$860,416,478

193 NM Sandia Laboratory

$28,476,701

73

$660,269,042

$1,785,651

$2,274,996,509

194 FL Grow Financial

$28,360,502

162

$519,688,241

$451,216

$2,234,804,488

195 MO Anheuser-Busch Employees

$28,269,620

160

$412,596,887

$12,328,630

$1,587,702,799

196 MT Whitefish

$27,415,990

148

$584,740,982

$0

$1,332,653,617

197 CA Bay

$27,255,600

93

$162,312,773

$15,518,659

$787,562,947

198 CT Charter Oak

$27,096,806

163

$537,981,039

$2,203,815

$958,462,938

199 WA Verity

$27,085,500

119

$142,925,118

$10,254,100

$489,647,302

200 IA Community Choice

$27,004,951

136

$83,924,415

$12,478,648

$449,359,763

201 IN Indiana Members

$26,332,432

163

$445,940,259

$17,404,493

$1,613,287,052

202 VA State Department

$26,321,451

79

$483,956,540

$11,261,404

$1,753,431,028

203 MA Webster First

$25,934,845

88

$516,006,506

$308,960

$841,875,692

204 NY Corning

$25,872,693

184

$297,215,220

$5,646,354

$1,219,827,156

205 CA Schools Financial

$25,852,931

175

$177,299,893

$14,802,050

$1,707,237,784

206 WI Verve, a

$25,735,389

173

$396,513,221

$7,106,462

$748,929,007

207 NY Quorum

$25,597,894

69

$349,732,756

$4,374,125

$971,302,322

208 FL Achieva

$25,266,480

127

$321,747,996

$11,236,629

$1,412,286,800

209 ID Potlatch No 1

$24,968,843

140

$94,228,843

$12,862,975

$848,918,887

210 SD Black Hills

$24,937,205

121

$334,225,710

$2,584,129

$1,095,646,241

211 VT Vermont State Employees

$24,898,007

161

$324,786,651

$14,451,116

$679,740,256

212 WA TwinStar

$24,780,490

148

$135,826,145

$14,863,736

$1,080,207,784

213 NM U.S. Eagle

$24,334,920

62

$180,276,498

$3,881,399

$899,945,484

214 VA Dupont Community

$23,934,108

147

$480,555,649

$6,725,508

$1,043,731,573

215 TX Texans

$23,872,902

159

$296,152,067

$3,538,073

$1,514,578,951

216 NE Centris

$23,812,397

160

$192,837,719

$14,290,478

$615,088,032

217 IN Centra

$23,771,485

156

$357,036,390

$6,772,514

$1,337,242,559

218 CA Educational Employees

$23,677,894

154

$318,890,851

$0

$2,640,216,673

Summer 2016 - PIPELINE 61

THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

Total Assets

219 CA Firefighters First

$23,446,620

67

$592,023,879

220 MI Lake Trust

$23,131,615

111

221 WA Sound

$23,090,111

127

222 MA Workers

$22,686,137

92

223 NV Silver State Schools

$22,546,235

97

224 PA Franklin Mint

$22,060,750

87

225 UT Cyprus

$22,034,367

94

226 OR Rivermark Community

$22,003,486

110

227 GA LGE Community

$21,975,950

107

228 CA First Financial

$21,781,300

61

229 OR Oregon State

$21,723,715

95

230 NY Empower

$21,669,834

174

231 PA Philadelphia

$21,222,068

90

232 IL Vibrant

$20,938,511

158

233 IN Indiana University

$20,935,608

130

$372,864,591

234 NY Suffolk

$20,714,204

232

235 MI Educational Community

$20,642,680

156

236 NY Melrose

$20,529,900

32

$460,401,949

$0

$1,925,107,877

237 AR Arkansas

$20,499,677

185

$197,914,208

$6,109,470

$1,049,473,974

238 MI Community Financial

$20,479,531

109

$280,000,871

$7,902,170

$707,357,835

239 AZ TruWest

$20,439,974

91

$246,934,875

$13,809,600

$939,160,741

240 MI Michigan Schools and Government $20,387,790

125

$489,924,133

$7,592,141

$1,577,973,305

241 CO Credit Union Of Colorado

$20,200,208

111

$279,538,100

$7,622,013

$1,327,863,248

242 OK TTCU The

$20,101,426

120

$189,613,130

$12,610,052

$1,652,528,710

243 VA Freedom First

$20,094,980

74

$127,298,285

$6,465,571

$414,731,189

244 MI 4Front

$19,990,898

223

$100,219,851

$0

$433,815,358

245 IN Purdue

$19,962,356

90

$440,313,718

$21,566,973

$1,030,844,113

246 TN Y-12

$19,926,483

128

$316,111,611

$403,000

$970,304,125

247 WA Red Canoe

$19,675,174

90

$247,028,585

$6,896,794

$671,943,692

248 WA Global

$19,584,833

104

$81,259,366

$9,364,615

$395,802,561

249 VA United States Senate

$19,428,788

18

$143,571,396

$0

$607,993,699

250 DC Congressional

$19,364,080

62

$250,830,252

$7,831,200

$864,980,067

251 MA Greylock

$19,200,232

109

$460,059,739

$6,319,523

$1,088,839,812

252 OK Weokie

$19,148,550

112

$301,826,271

$4,709,525

$1,035,296,287

253 CA Kern Schools

$19,070,957

104

$454,424,525

$2,368,671

$1,410,087,515

254 CT Sikorsky Financial

$19,012,803

107

$171,277,141

$200,125

$725,107,817

255 TN Knoxville TVA Employees

$18,940,606

198

$443,439,691

$1,686,906

$1,589,669,314

256 WI Kohler

$18,909,005

142

$117,825,670

$11,459,344

$321,490,549

257 MI Michigan First

$18,882,354

84

$150,561,171

$4,972,851

$786,656,371

258 CA Credit Union of Southern California $18,711,136

51

$306,649,537

$4,063,508

$1,045,877,903

259 CA America’s Christian

27

$167,744,278

$0

$326,342,969

62 PIPELINE - Summer 2016

$18,687,065

$5,177,135

$1,093,631,464

$546,194,177

$0

$1,735,798,239

$228,100,333

$14,115,697

$1,310,066,730

$524,414,622

$8,931,847

$1,346,474,765

$317,685,795

$11,339,120

$690,340,705

$247,993,097

$7,153,540

$978,587,141

$149,900,649

$8,487,691

$769,553,115

$167,326,350

$12,129,075

$741,154,946

$294,917,367

$0

$1,106,445,174

$161,665,022

$0

$455,476,128

$201,052,827

$7,353,884

$1,017,389,497

$242,137,273

$16,884,029

$1,490,520,375

$256,580,143

$4,930,200

$1,014,482,143

$192,389,018

$7,651,280

$572,090,793

$3,013,045

$863,641,840

$337,854,565

$145,000

$1,006,655,166

$221,744,008

$4,551,537

$452,967,542

THE TOP 300

Name of Rank Credit Union

$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages

Total Assets

260 MA Align

$18,571,600

81

$243,977,511

$5,089,894

$557,007,262

261 MA Hanscom

$18,480,589

75

$214,556,262

$15,108,917

$1,136,822,671

262 IL Motorola Employees

$18,473,957

52

$279,711,334

$1,083,400

$901,902,239

263 NY Progressive

$18,385,503

5

$87,532,241

$0

$635,423,699

264 MI Honor

$18,370,706

148

$218,699,767

$5,185,745

$682,257,485

265 CA USE

$18,293,617

59

$258,370,938

$12,927,202

$851,701,216

266 NY Island

$18,277,050

68

$250,192,293

$1,580,750

$1,113,621,182

267 MA St. Anne’s Of Fall River

$18,246,170

94

$423,566,602

$11,076,129

$873,635,986

268 NC Self-Help

$18,223,871

135

$381,101,385

$0

$637,596,076

269 CA San Mateo

$18,205,050

59

$224,568,163

$1,300,300

$887,457,960

270 VT Vermont

$18,135,060

170

$135,295,693

$9,728,623

$472,620,583

271 CA Southland

$18,074,070

44

$157,991,630

$6,477,120

$592,823,770

272 FL MidFlorida

$17,942,167

66

$646,463,993

$35,836,601

$2,490,413,186

273 CT Connecticut State Employees

$17,829,154

146

$267,164,737

$0

$1,739,246,507

274 PA Freedom

$17,484,319

79

$170,771,569

$3,209,220

$707,164,875

275 CO Colorado

$17,392,861

70

$26,522,122

$14,347,023

$151,378,138

276 IL DuPage

$17,244,474

87

$13,957,413

$18,137,226

$325,066,475

277 OH KEMBA Financial

$17,211,797

128

$260,906,019

$6,128,926

$1,074,586,484

278 SC SRP

$17,066,412

160

$92,222,086

$10,072,063

$777,510,909

279 MI Community Choice

$17,039,988

57

$200,484,456

$0

$770,180,054

280 CA San Francisco

$16,955,059

35

$335,375,924

$0

$1,013,460,247

281 NE Liberty First

$16,932,488

117

$60,006,555

$14,002,838

$207,755,359

282 OR MaPS

$16,914,110

161

$159,188,578

$4,638,037

$574,686,908

283 VA BayPort

$16,907,507

78

$403,216,459

$3,606,905

$1,479,796,576

284 KS Heartland

$16,905,833

278

$109,106,716

$6,204,173

$276,066,170

285 WA Solarity

$16,892,999

100

$190,506,899

$35,366,043

$639,234,850

286 AL America’s First

$16,845,573

151

$360,632,786

$4,082,151

$1,417,555,754

287 TX Smart Financial

$16,686,629

88

$123,404,122

$4,949,361

$654,232,341

288 VT NorthCountry

$16,624,133

129

$167,397,095

$5,962,390

$507,982,504

289 IL IH Mississippi Valley

$16,589,829

84

$191,802,768

$15,096,136

$1,011,458,835

290 HI Aloha Pacific

$16,577,903

96

$216,828,467

$655,000

$756,354,140

291 MA Sharon

$16,527,725

82

$239,814,771

$0

$508,134,235

292 IN Midwest America

$16,504,834

109

$146,040,833

$93,575

$525,334,725

293 IL NuMark

$16,382,233

90

$36,227,887

$14,582,333

$228,607,872

294 OR Rogue

$16,299,914

102

$193,312,527

$11,407,656

$1,136,580,509

295 TX Shell

$16,297,897

127

$168,825,089

$8,122,230

$813,686,657

296 WA Harborstone

$16,255,901

49

$277,352,458

$0

$1,151,922,980

297 CA Christian Community

$16,190,757

49

$446,176,838

$0

$636,088,203

298 AZ Vantage West

$16,173,067

64

$349,909,215

$2,215,245

$1,588,857,340

299 MA First Citizens’

$16,141,690

70

$247,406,113

$4,713,300

$690,829,634

300 GA Georgia United

$16,107,922

102

$158,121,801

$0

$1,122,454,161

Summer 2016 - PIPELINE 63

TRAINING AND DEVELOPMENT

The Last Word

Do You Ever Ask Yourself, Is This Mortgage Business Worth the Effort?

By Tracy Ashfield

T

here is no doubt that as we mark the CFPB’s fifth anniversary, you are feeling the pressures of intense regulatory requirements and don’t see an end in sight. n You have invested endless hours in reading and researching new regulations. You’ve been on countless webinars with your LOS providers and other third-party partners, trying to ensure your processes, procedures and documents comply.

We all know the adage “time is money.” Well, it’s sure the case in our business.

According the Mike Fratantoni, Chief Economist at the Mortgage Bankers Association, in 2008 the average cost of writing a new loans was $4,500, while in the fourth quarter of 2015 that cost increased to more than $7,700.

Ouch, TRID was tough!

So, it does beg the question, Is this all worth it?

Yes. Credit union market share has continued to rise. I believe the first jump back in 2008 had a lot to do with being in the right place at the right time with the right brand. The big lenders

“The growth in CUs’ [market] share has continued well after the big lenders have stepped up marketing efforts …”

64 PIPELINE - Summer 2016

were tightening credit, retrenching and experiencing a lot of negative press.

As news reports of homeowners struggling to keep their homes and reports of unresponsive lenders and servicers flooded the news, many homeowners and potential borrowers started to think twice about shopping just on rate. People wanted to know who they were doing business with, and they put value on doing business locally with a known entity, whether or not it meant someone physically in their community or a financial institution they felt a “common bond” with.

THE PERFECT MATCH

Enter credit unions, the perfect match.

But the growth in CUs’ share has continued well after the big lenders have stepped up marketing efforts, and even mortgage brokers are gaining a little ground. Why? Because small to mid-sized community lenders matter.

Week after week, I am privileged to work with credit unions of all sizes and fields of membership. I continue to be awed by the people I meet and their commitment to provide competitive loan programs with fair rates and fees.

The passion for putting members in the right loan comes through everywhere I

“People wanted to know who they were doing business with, and they put value on doing business locally …” go. This is what is keeping credit union market share growing.

Does that mean we ignore the growing cost of “manufacturing” a mortgage loan? No. Most credit unions’ fixed costs have leveled off. Continuing to invest in automation is crucial.

Working in a paperless environment also helps. It allows for remote workers and collaboration between staff members in multiple locations, not to mention the hours spent at the photocopy machine!

This issue of the Pipeline highlights many of the key strategies necessary to succeed—hire good people, capture the business coming in the door, understand millennials.

Credit unions, please don’t give in.

You bring so much value to your members and your community. You truly make a difference.

Tracy Ashfield is president of Ashfield & Associates, a consulting and training business that assists credit unions with mortgage lending. She also works with NCUA to provide training and education on residential mortgage lending for examiners and regulators, and with ACUMA.

ahead.

Always a step

How do you deliver a mortgage program that keeps you ahead of the competition?

STEP 1: Offer the widest range of loan options to capture every type of home buyer, with award winning service to retain your members for years to come.

STEP 2: Choose a mortgage program that’s built to match your resources and objectives. Never settle for one size fits all.

STEP 3: Work with CU Members Mortgage, a leader in mortgage origination and servicing for more than 30 years.

At CU Members, we’ve rebuilt our business model to boost your mortgage program with innovative new options that benefit your bottom line. It’s unlike anything in the industry, and all it takes is one conversation to see how we’ve stepped up our game. Want to learn more? Give us a call.

Listen i n g. L en d i n g. Le ade r sh i p .

800.607.3474 ext.3225 www.cumembers.com

info@homeloancu.com

CU Members Mortgage is a division of Colonial Savings, F.A. NMLS #401285

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