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Done right, home loans are something both members and credit unions can get excited about
I recently went looking for the official definition of “memberlicious.” It wasn’t a big surprise that when I consulted the dictionary in the credit union’s office (the 1978 version of The American Heritage Dictionary of the English Language), memberlicious wasn't there.
It should have been tucked right between member and membership if I remember my alphabetizing skills from grade school, but it wasn't. That’s because memberlicious is just a made-up word. And I confess I made it up to be part of my blog, “Mortgages are Memberlicious.”
But the word really does have meaning. Memberlicious is an adjective that describes an experience that is highly pleasing to your members’ senses. It’s something both credit unions and their members can get excited about.
Mortgages are definitely memberlicious. Why? Mortgages are the best way credit unions can have a meaningful impact on their members' lives. While we technically “just” give the member a mortgage, we really give them so much more. We give them a sense of ownership, a place to call their own, something to be proud of. We give them an opportunity to create real wealth. We give them a place to raise a family. We give them a place to create memories. It doesn't get much cooler than this.
Mortgages are also great products for credit unions themselves. Mortgage borrowers have stronger loyalty to their financial institutions and often make their mortgage holder their primary financial institution. Mortgages also generate needed income–from per-loan fees, loan sales, interest income, and servicing income, all of which benefit the credit union.
So how can a credit union be memberlicious? Well there’s lots of ways. Here’s a couple quick ones:
Remember, members don’t buy houses every day: Mortgage lending is complex now, and becoming more and more complex every day. We make home loans every day. A member only gets a mortgage once every few years. Don’t forget that. Use that knowledge as a litmus test for everything you do. Would someone who doesn’t understand mortgage lending understand what you are saying? If not, make it easier to understand.
Hire experts: Make sure you’ve got the right people originating mortgages. Keeping up with industry changes and requirements in mortgage lending can be a big job. Don’t entrust mortgage lending to folks who have lots of other duties. Entrust mortgages to full-time, professional originators who practice the art of origination every day.
Make sure you are on the member’s side: The mortgage process is full of documentation and proof. We have to prove just about everything to the underwriter and the secondary market. Help the member understand why we need what we need. Your choice of words can be the difference between making the member feel like they are being accused of lying and the member knowing you are doing right by them.
Be specific: Members sometimes hear what they want to hear, so make sure you are specific with them. Don’t lead them on. Stay away from saying generic things like “Your loan request might be difficult.” A member has no clue what that really means. Tell them why it might be difficult.
Don’t default to the expected: This is advice to the credit union and the originator. Too many times borrowers think they need a 30-year, fixed-rate mortgage and, too often, the lender just defaults to that. Understand a member’s situation and offer the right product. For a first-time home buyer who wants to start a family in a couple years, buying a two-bedroom starter home may be a great option – but taking a 30-year, fixed-rate option probably isn’t. A consumer-friendly adjustable rate loan would be a better option and save the member money.
Stay away from jargon: Members have no clue what a DTI, PMI or LTV is. Talk in terms that make sense to the member.
Celebrate: Buying a home is a big deal. Celebrate that fact. Make a big deal out of it when the member is approved for the loan. Go to the loan closing and congratulate the borrower. Consider a token gift. Check in with them after the loan closes and the move is done and see how they love the home.
A home loan is the biggest financial obligation most Americans will ever make. It’s often been said that no one wants a mortgage, but everyone wants a home. Credit unions need to focus on the member experience during the mortgage process especially since the product is a commodity. Credit unions that are memberlicious make their mortgage lending as easy as they can for members so members have a great experience, and both the members and their CU can get excited.
Happy members are our best advertising. Credit unions that practice being memberlicious and focusing on the member will make members happy and see great results. So go be memberlicious!
CUES member Tim Mislansky, CCE, is president of myCUmortgage, SVP/chief lending officer for $2.7 billion Wright-Patt Credit Union, Fairborn, Ohio, and chief blogger for Mortgages are Memberlicious. With more than 20 years of credit union experience, Mislansky sits on the ACUMA Board of Directors, is a member of the Accenture Mortgage Cadence Advisory Council, and serves on the board of the Dayton Ohio Habitat for Humanity. He is passionate about helping credit unions be better mortgage lenders.
Photo credit: Dollarphotoclub.com/taviphoto
