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We’re a week into 2015 and hopefully you haven’t yet broken your new year’s resolution. Most of us make admirable and worthwhile resolutions in our personal lives, such as, “I want to eat better” or “I will exercise more” or “I will endeavor to be a better spouse.” While I’m not sure many credit union folks make work-related resolutions, what would yours be if you did?
I suggest resolving to be more “memberlicious”—which means offering members a highly pleasing mortgage lending experience. Here are four ideas to help you deliver on your new year’s promise. And remember, the results of good resolutions can be measured.
Resolve to make 97 percent LTV loans: Recently, Fannie and Freddie re-launched their 97 percent loan-to-value offerings. They determined that mortgages with 3 percent down performed essentially the same as mortgages with 5 percent down and that, as credit scores climbed, too many Americans were not able to achieve home ownership because they lacked a down payment.
So resolve to get aggressive in marketing 97 percent LTV loans to your members and the Realtors in your area. Not every lender is going to offer these loans, so make sure you tell the world (or at least your local market). These loans are great alternatives to Federal Housing Administration lending, and should result in financial savings to the borrower over the life of the loan.
Resolve to save members money with a HARP refinance: With 30-year fixed rates near or below 4 percent, many members who sat on the sidelines for the Home Affordable Refinance Program might now have an interest in a refinance. HARP was designed for borrowers who are current on their mortgage, but can’t refinance because they owe more than the home is worth. Available until the end of 2015, HARP allows a borrower to get a new mortgage with better terms.
A recent CNN Money story indicated there are 7.4 million homeowners with a rate above 4.5 percent who could qualify and benefit from a HARP loan. But for whatever reason, these borrowers are not applying.
Resolve to get aggressive on reaching out to your members who qualify. You’ll save them money and generate revenue for your credit union. If you sell to Fannie or Freddie or use a private mortgage insurance company, they can probably help you get a list of your loans that are likely to be eligible for HARP.
Resolve to help more first-time home buyers: First-time home buyers still represent a significant portion of the U.S. housing market, but the percentage has been shrinking due to perceived challenges associated with higher student loan debt along with difficulty in saving for a down payment. So resolve to look for ways to help members interested in home ownership achieve their dream. Ideas such as educational seminars, down payment assistance programs, down payment savings programs (think Christmas Club for home ownership), and member-focused portfolio products are all ways to potentially succeed at this.
Resolve to be a partner to real estate agents: Real estate agents still heavily influence home buyers’ choice of mortgage lender. Are you partnering with real estate agents or just co-existing? Resolve to be a partner in the new year. This means helping Realtors understand the complicated and ever-changing world of mortgage lending. Tell them about the 97 percent LTV loan, how it can help them sell more homes, and be sure to help them understand that the Consumer Financial Protection Bureau’s “know before you owe” disclosure guidelines are going to change how loan closings work.
Partner with Realtors by keeping them in the loop about the status of their client’s loan –don’t make them call you for a status. Ask for their business and thank them when you get it.
Americans fail at their New Year’s resolutions 60 to 90 percent of the time, depending on the source you cite, but your credit union can be the exception. Resolve to do something to help more members with home ownership, and don’t forget to establish a target against which you’ll measure your success.
When your mortgage team becomes more memberlicious, your members will thank you and so will your credit union.
CUES member Tim Mislansky, CCE, is president of myCUmortgage, SVP/chief lending officer for $2.9 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.
