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Ever wondered if your credit union mortgage lending program should sell loans on the secondary market? What kind of fees should you should charge, if any? How to streamline member access to lending information? How important it is to network with the real estate industry? Or what kind of promotions really work?
Read on to see how six mortgage lending experts share their answers to such questions as well as other secrets of their success.
JANE HAMMIL Real Estate Operations Supervisor $100 million FAA Employees Credit Union Oklahoma City
In the third quarter of the year, we found ourselves scrambling for a piece of the purchase market, ever reminiscent of last September's booming volume. Now that the refinance market is gone and servicing portfolios are repriced at much lower levels, lenders are looking for more profitability. They want more fee income and are looking for ways to increase their bottom line.
Here are some suggestions that have worked for our mortgage department:
* Charge a 1 percent origination fee on second mortgages. The fee comes out of the borrower's closing proceeds, and if the rate is competitive, members don't mind paying this extra charge.
* Charge a 1.5 percent origination fee on out-of-state loans. This would not be possible for government-insured loans, whose maximum origination fee cannot exceed 1 percent. On conventional loans, however, this fee can help offset the extra research, mail and phone time that accumulate quickly on loans outside your state.
* Don't sell all your loans. You can keep variable, balloon and shorter-term loans in your own portfolio without long-term interest rate risk. When a loan does not conform to secondary market guidelines, take a closer look and consider putting it in your own portfolio with private mortgage insurance coverage (even if loan-to-value is under 80 percent)
* Offer a good variable-rate product. Protect your future yields by offering an "in-house" adjustable rate mortgage loan, especially for terms more than 15 years. Develop a method of showing members the advantages of a variable product.
* Never stop advertising. Your next month may not be as busy. Some promotions we have offered our members are discounts to first-time home buyers and applicants for permanent construction loans. A "no-fee" second mortgage promotion...