The Future of Credit Unions in Mortgage Lending

The Future of Credit Unions in Mortgage Lending
Why the time is right for credit unions to increase market share and how they can effectively compete in the new marketplace . .Credit unions have a tremendous opportunity to seize market share in the mortgage lending business, following the collapse of non-depository mortgage banking lenders They now have several advantages they can exploit to fill the lending void - strong relationships with their members, healthy financial standings due to new legislation, and an abundance of expertise through seasoned mortgage professionals and outsource service providers In addition, new Web-based mortgage software and mortgage lending technology can provide even the smallest credit unions with technology systems comparable to those used by Fortune 500 firms . .Relative newcomers to mortgage lending, credit unions received authority to offer mortgages in 1978 Their regulator, the National Credit Union Administration (NCUA) didn’t issue lending guidelines until 1989 Later guidelines in the 1990s encouraged them to offer real estate loans, while clarifying the regulator’s concerns about risks . .While credit unions cautiously entered the mortgage arena, the competitive advantage shifted away from depository lenders like credit unions to “pure play” non-depository mortgage lenders that were not as concerned about risk These new players had access to government-backed mortgage loan programs as well as to a large number of private investors, which increased economies of scale, profitability and risk to unprecedented levels . .But recently, the landscape has been permanently altered National commercial banks and non-depository mortgage bankers, which once dominated mortgage lending, have lost favor with both mortgage industry regulators and borrowers Their risky business models have brought about their demise, and the collapse of the non-agency securitization created a credit crunch that left a void in mortgage lending . .Seize the Advantages . .Credit unions can fill that void by leveraging their advantages: . .1 Strong relationships with their members, .2 Accountability in Originations and Servicing, .3 Healthy balance sheet opportunities due to increased deposits, .4 Familiarity with regulation and compliance, .5 Unprecedented availability of expertise through both seasoned mortgage professionals and specialized business process outsource providers, .6 Web-based loan origination software and imaging tools that provide higher levels of efficiency and department collaboration, .7 Availability of Fortune 500 technology that enables high-quality mortgage operations with less expense and hassle than ever before . .To read more about the Future of Credit Unions in Mortgage Lending read the complete white paper authored by Lionel Urban found at the PCLender Website .
Source: www.rsstnx.com