TheMReport — News and strategies for the evolving mortgage marketplace.
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14 | TH E M R EP O RT COVER STORY T o get the full picture of credit unions in to- day's mortgage industry, we sat down with Navy Federal Credit Union to get an inside look on how they have remained the largest credit union in the U.S. for so many years. With over 6 million members and more than $73 billion in assets, Navy Federal leads the pack, serving those affiliated in any way with the Armed Forces, Department of Defense, Coast Guard, or National Guard. This includes Army, Marine Corps, Navy, Air Force, and Coast Guard regular Active Duty and reservists, and Army and Air National Guard personnel. Navy Federal Credit Union has been in business since 1933 and has the employees to match its longstanding reputation. Navy Federal's VP of Mortgage Lending Katie Miller and her team: Assistant VP of Field Mortgage Operations of the Real Estate Liaison Team Kevin Parker and Loan Officer Paul Garcia are changing the way credit unions are perceived one member at a time. On the Winning Team N avy Federal had a stellar year in 2015, originating 12.3 billion dollars in mortgage loans and put 40,000 members in homes or refinanced their homes. The com - pany surpassed their previous best year in 2013—which was also a big refinance year— by a billion dollars. "A better mortgage situation for our mem - bers is a huge success for us," Miller stated. "We just had a banner year." The mortgage products at Navy Federal are another standout feature of the company. Niche Inside Look Navy Federal Credit Union's Top Executives Reveal What it's Like to be on Top and How they Remain There provide estimates of all the costs of a mortgage to customers three days prior to closing. A recent report from Moody's Investors Service said that TRID compliance violations are a widespread epidemic in mortgage originations. According to Moody's Analysts Yehudah Forster and Lima Ekram, a number of third-party firms reviewed recent residential mortgage loans for TRID compli - ance and found violations in over 90 percent of the loans. The report showed that many of the TRID vi- olations were only technical, but still proves that lenders are struggling to comply with the new regulation. "TRID rocked everybody's world. It was a big change; it was a big change to the forms; it was a big change to the process in the industry; and it was a big change to a lot of our partners in the industry," Miller stated. First Technology Federal Credit Union CEO Greg Mitchell found that TRID has not only caused confusion for consumers, but a fair amount of confusion among the mortgage industry as a whole, including title companies, escrow companies, Realtors, and borrowers. "I think that part of the TRID journey is really about educating all of the people that are involved in the mortgage process about what's required, what it's going to require, and what is the standard," Mitchell noted. "The way to fix that is to spend more time talking. While financial institutions are prepared, or many financial institutions are prepared, others in the mortgage industry are not." Mitchell believes that the CFPB is really trying to create a process which provides more transparency and understanding on the part of the American consumer, but he is "not sure they understood the complexity of the [TRID] process and what that really meant." "Until the system—and that's broad from the Realtor all the way through Fannie Mae, Freddie Mac, and investors—run through a few cycles with TRID, it's going to be difficult and burdensome," Mitchell stated. "Just like learning a new foreign language, it takes a fair amount of time to begin to speak that language and understand it properly. But once you process your point then you can become quite fluent. We need to learn to speak that foreign language and become fluent on accelerated doses, and TRID is that new language." TRID is likely the largest regulatory change in the mortgage industry in several years, but credit unions are confident that they will overcome the new law— but not without paying a price. "We applaud and agree with any attempt to protect the consumer," Harmon stated. "Consumer protection is what credit unions are all about. Unfortunately, to do this comes with a cost that will either be absorbed by the lender or passed on to the member. For some credit unions the cost may be so high that they decide to get out of the mortgage business altogether. I think this is unfortunate as it may result in fewer choices for mem- bers of those credit unions." First Comes TRID, Then Comes Compliance W ith new regulations in the mix, compliance is becom- ing a larger priority at credit unions. Each institution may have its own approach to following the rules, but at the end of the day the goal is the same—stay out of the CFPB's radar. "The way to maintain compliance and avoid penalties is to simply know the law and do what it takes to stay compliant with the law," Harmon said. Nowicki agreed, "We're under the gun. We absolutely must 14 | TH E M R EP O RT Katie Miller and Kevin Parker discuss how Navy Federal sets itself apart from other lending institutions.