February 2016 - The Industry's Best Kept Secret

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 15 COVER STORY lending, tailored to the members is one of the most attractive aspects of the credit union. "This isn't an organization where somebody steps off the street to get a mortgage. Like with me, our members have been members for decades, and they have history with us, and it's our mission to serve them and offer the types of products that they want," Miller said. "It's really that specialized, customized service that separates us from everybody else, and separates credit unions in general. We all have the mission to serve the members, not to make a profit. It's not about that." She continued, "Our members are not just a number or an application, they are members. It's not just a one-time loan with us, it's part of your relationship with the credit union. Our staff is really committed to that and knows that." The banner year and the exclusive member- focused products would mean absolutely nothing without the mortgage team at Navy Federal drives these positive results. "I've never seen a harder-working, dedi - cated group of people, working to service their membership as I have here," Garcia stated. "I personally have never worked as hard in my life as I have here, working on the outside. And the other fallacy is that fact that we do not have a lot of very experienced professionals that work here that have come from the outside from commercial banks and institutions, and that includes Fannie Mae and Freddie Mac." The TILA-RESPA Integrated Disclosure (TRID) rule that swept the mortgage industry back in October 2015 was something that that Miller, Parker, and Garcia agreed that Navy Federal has handled with ease and grace. "We started planning early and have been meeting hot and heavy on this since the beginning of the year," Miller said. "It's been priority for us as a credit union, a systems priority, my personal priority, and it's been a lot—a compliance priority as well." Parker added, "We are very proud of the fact that we've been able to implement that regulation while having the biggest, most pro - ductive year in the history of our organization from a mortgage standpoint. It is a tremendous success to our team members." Changing the Game P arker and Garcia stand firmly behind Miller elevating the success of the company and covering every inch of the mortgage operations at Navy Federal. "I've got expertise in every part of the mortgage industry and mortgage originations that you can imagine," Miller stated. "I think we do an excellent job and that isn't necessarily other people's experiences at other institu - tions." Parker, a 19-year lending veteran, manages all of the originations at the company, including loan officers across the country. He has been working in management for over a decade and has also been a processer and loan officer. comply with these regulations. It just makes life a little bit more challenging from the origination side of the loan process." Michael Popp, VP of Home Loans at Golden 1 Credit Union said that credit unions need to have a robust program to ensure regula- tory compliance that starts with the member-facing staff and goes up to management. This includes "a knowledgeable team and proce- dures and policies that encompass quality control, ongoing monitor- ing, and accurate, timely reporting." An Origination Dilemma M ortgage lending is something that both those in the in- dustry and consumers have a hard time associating with credit unions, but these cooperatives are absolute- ly working within that realm. Just like larger lenders they are trying to get their products noticed, moni- tor origination costs, and reach the first-time, millennial homebuyer. States Employees' Harmon finds that one of the biggest issues with mortgage lending facing credit unions is getting the opportunity to educate members about what mortgage products and services are available to them through credit unions. "More and more today, Realtors help guide the homebuyer through the entire process, even assist - ing them with a mortgage loan through an affiliated lender, often located right down the hall from the Realtor's office," Harmon said. "Credit unions may never get a chance to discuss the products that may better fit the member's needs. One-stop shopping is very appealing to a lot of people and stops them from thinking of their credit union." Costs associated with loan process - ing are also weighing heavy on the minds of credit union executives. "The biggest challenges we face today are the rising costs associ- ated with originating and process- ing home loans," Popp stated. "This includes attracting talent in a competitive marketplace, as well as the growing investments that are necessary to comply with evolv- ing regulations in the mortgage industry. Although it's improving currently, there are few investor options in the secondary market other than the GSEs." Another challenge for credit unions is the elusive millennial generation and first-time home - buyers. According to, millennials, born between 1981 and 2000, occupy about 27 percent of the U.S. population and are the largest share of homebuyers at 32 percent. Millennials make up 68 percent of first-time homebuyers and outnumber baby boomers by 8 million. Still, only 40 percent of the cohort own homes while 60 percent rent. "It's about giving millennials the tools—because that's, in our "The biggest challenges we face today are the rising costs associated with originating and processing home loans." —Michael Popp, VP of Home Loans, Golden 1 Credit Union Katie Miller, Kevin Parker, Paul Garcia, and the team hard at work at Navy Federal's Virginia headquarters.

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