Home Financing: A Great Opportunity for Credit Unions

by Jeff Shood
Home Financing: A Great Opportunity for Credit Unions

Credit unions are known for world-class customer service, but most home lending business is going to banks or non-traditional lenders rather than to credit unions, even when it comes to their own members. What are credit unions missing? What are the risks and benefits of diving deeper into home lending? We examine these issues—and more—in the newly released Intuvo white paper: The Keys to Credit Union Success in Mortgage.

According to J.D. Powers & Associates annual surveys of customer satisfaction by industry, consumers taking out mortgage loans are rarely satisfied. In 2017, despite the fact that lenders responded to the consumer’s demand to go digital, customer satisfaction still declined when compared to the previous year.

Further, studies show that consumers feel all lenders look essentially the same. They offer most of the same products from the same secondary market investors with pretty much the same rates and fees.

Credit unions can do it better. Member-owned institutions take customer service more seriously. They are generally excellent at satisfying their members and have been recognized as leaders in this area over banks. If these skills are applied to the mortgage loan origination process, credit unions could win more of this business and reap the benefits.

The products and services the financial industry provides to members and consumers are complex; even the simplest checking account can require the assistance of a trained staff member to explain correctly. The mortgage is not only the most complex product offered by an institution—it’s also the most complex transaction most consumers will enter into during their lifetimes.

This provides a great opportunity for a credit union to demonstrate the excellent customer service it traditionally delivers and that its members have come to expect. The mortgage origination process involves a great deal of interaction between the CU staff and the member, which ultimately drives member engagement. There is no better product for deepening the member relationship than the mortgage loan.

You may be interested in: more details about the mortgage LOS from CU Direct.

Additionally, credit unions that continually explore new areas of loan growth realize the potential revenue offered by additional products. By advancing member loyalty through the mortgage transaction, the credit union opens the door to other important products and services including estate planning, financial planning, and investment advisory services

With a large amount of potential income, increased member engagement—and more—mortgage offers a huge, very real opportunity for those credit unions willing to invest in the process and better meet their members’ needs along the way.

Discover more about potential risks and benefits of home lending by reading Intuvo’s white paper The Keys to Credit Union Success in Mortgage.

About the Author

Jeff Shood
President/Co-Founder, Intuvo