How Credit Unions Can Set Themselves Apart in the Mortgage Lending Business

by Roger Hull
How Credit Unions Can Set Themselves Apart in the Mortgage Lending Business

Since their inception, credit unions have been able to leverage the membership dynamic to set themselves apart from other financial institutions. But when it comes to building a mortgage lending pipeline, it takes more than just a built-in membership base to serve today’s borrowers’ needs. Let?s take a closer look at three ways credit unions can set themselves apart and win more mortgage business.

1. Be tech-savvy
According to customer experience experts at J.D. Power, home mortgage customers want technology that makes the process faster and easier. They don’t want technology to create a wall between them and their trusted advisors. Self-service is okay up to a point, but the data show that home loan customers still want someone they can talk to.

We have found that lenders who incorporate mortgage loan lead management with point of sale and fulfillment, such as our new Origence™ mortgage lending platform, are significantly more successful. The productivity lift can be as high as 40% and because speed decreases loan fallout, lenders see as much as a 75% increase in pull-through.

The Mortgage Bankers Association has predicted that purchase money mortgage loan originations will increase to $2.61 trillion in 2020. That’s an increase from its October estimate of $1.99 trillion, and a 20% increase over 2019’s $2.17 trillion. This represents a fantastic opportunity for these institutions.

2. Be the trusted advisor
According to a study performed by Ernst & Young (E&Y), American consumers want to trust banks, with 60% agreeing that banks have an important role to play, but in reality consumers don’t have faith in banks. When asked, consumers said they have lower levels of trust in traditional banks to fulfill strategic pledges, including providing unbiased advice.

This is the credit union’s best opportunity to stand out from competing institutions.

Borrowers are looking for someone to trust. Credit unions are already that trusted source for auto loans. They can—and should—also play that role for home financing.

3. Be the customer service experts
One area in which credit unions have a competitive strength over other lender types is customer service. Lenders have been struggling to improve the borrower experience for more than a decade now and are gaining some ground. This is largely due to the application of new technologies that allow borrowers to perform research, get prequalified quickly and easily, and submit information electronically.

The problem is that customer expectations have changed, and the quick technology fixes that have worked in the past aren’t delivering the desired results. That’s because deploying technology is only part of the digital mortgage process.

Traditional mortgage lenders are struggling to meet borrower expectations, while working to fend off new competitors. Meanwhile, credit unions already have good working relationships with 100 million American consumers. Even better, 72% of credit union members are satisfied with their institution, compared to only 60% for regional banks and 52% with national banks.

Bottom line, credit unions have a significant opportunity to increase market share in the communities in which they operate. Setting themselves apart by taking these steps will go a long way in positioning credit unions for long-term growth and success in the mortgage lending marketplace.

About the Author

Roger Hull
Roger Hull is the chief product officer at CU Direct, where he oversees strategic planning and product development, including portfolio analytics and advisory services. Additionally, he oversees software development and implementation for all automotive and lending solutions. Roger has more than 30 years of strategic leadership experience in the mortgage and technology industries.