MReport October 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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M R EP O RT | 23 FEATURE strategy could also help depository lend- ers, Finnegan noted. The independent lenders focus their marketing efforts strictly on their mortgage products. Depository institutions, on the other hand, have focused more on institutional advertising, featuring the variety of ser- vices they can offer to their customers. "Banks have to have a more focused marketing strategy to defend their market share," Finnegan said. However, Post sees the idea of being a one-stop shop for a member's financial needs as a benefit. "Members are literally vested in the credit union as member-owners, and vice versa. A member is not just a number; they have a relationship with us. In many cases, this allows us to offer unique services, such as portfolio excep- tions or unique products such as jumbo loans to 90% without PMI, or 100% financing options." Another way to help defend market share is to retain the servicing after sell- ing the loan into the secondary market. Doing so enables the bank to have a monthly "touch" with the customer, Finnegan explained. "That monthly touch with the customer base can be an important part of their marketing strat- egy on an ongoing basis. They need to take advantage of the inherent strengths that they have." The successful banks and credit unions are those that can execute on all those strategies effectively and that know their costs well, understanding their profits and losses on different types of mortgages, Finnegan added. "We do find banks that are not as in touch with their cost structure and their profitability for mortgage, and we try to help them with that. But the successful banks know their profit and loss on mortgages very discreetly, and again, can bring to bear those capabilities that they have. For ex- ample, some banks have expertise with construction lending for single-family homes. As more homes get built, they need to capitalize on that expertise." It's easier for depository institutions to hold these construction loans on their balance sheets than it is for independent mortgage lenders, Finnegan said. Technology Considerations D epository institutions shouldn't look to compete on rates, but rather ™ | 972.458.8583 Loan Origination, Mortgage & Commercial Servicing Software FICS ® has delivered exceptional automation, performance, system support and value for nearly four decades. Discover the FICS ® Advantage Your Mortgage Software Partner Since 1983

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