18 Strategies

dgreen@primealliancesolutions.com — 2008-06-24T06:21:58-07:00

It's astonishing with all that's happened to the mortgage markets in the past 12 months that members, Realtors, builders and our communities remain unaware that credit unions are some of the most stalwart lenders in the industry. It’s time to change that. Past time, in fact. 

 First things first. Standard awareness advertising, where we market general messages to the general public, is not enough. We must begin engaging in highly targeted housing finance marketing campaigns to those members we know to be homeowners. Not only can we know who among them own homes, we can know who they financed with, the type of loan they have, the interest rate they are paying. With this almost perfect knowledge, we can put an almost perfect, custom offering in front of every one of our home owning members. Prime Possibilities, offered in collaboration with MGIC, is the solution for this highly targeted activity. 

 Second, it's time we market ourselves to the Real Estate Community and other transaction influencers. Strategy #15 addresses this very need. Creating awareness of our capabilities while establishing relationships with those that influence our members’ financing decisions is absolutely essential to our long-term success as mortgage lenders. 

Participate in the CU Housing RoundTable

dgreen@primealliancesolutions.com — 2008-06-23T06:14:56-07:00

Ever have the feeling you are too busy doing to really, truly, deeply think about what you are and, more importantly, should be doing? Us too. This is one of the main reasons we formed the CU Housing RoundTable. Credit union mortgage lenders need time to think--together--about those strategies we should pursue that will help put more members in homes more affordably. Putting more members in homes also moves us closer to 10% market share within the next seven years, the RoundTable's Big, Hairy Audacious Goal.

How will participation in the RoundTable specifically help your credit union? By focusing us all outward and forward, on the broader industry, on the remarkable opportunities that lay ahead, on issues important to members, on strategies that will help our credit unions thrive. Credit unions have always done their best thinking together. The Housing RoundTable focuses our collective intelligence on housing finance, the next great frontier of credit union lending.

Expanding horizons and boundaries is the primary task of all Think Tanks, the CU Housing RoundTable included. Think Tanks work best when the best minds participate. Join now, volunteer to help write a white paper, attend the annual meeting on October 16 and 17 in Seattle. For more information visit www.cuhousingroundtable.com.

Establish 'Influencer' Relationships

dgreen@primealliancesolutions.com — 2008-06-19T21:54:04-07:00

We call this the 'Strange Bedfellow' strategy. Like Strategies Number Three and Thirteen, this, too, opens our mortgage lending cocoon to the broader world, into the primary transaction in which we hope to play a role for all members. Realtors, builders, estate planners, accountants, all influence where our members finance their homes. Precious few of them think credit union when they think mortgage.

The single biggest influencer is the Real Estate Community: Brokers, Agents, Realtors. Once they begin working with a buying member, the member is commonly in their thrall. Putting the Real Estate Community under a spell of our own should become a primary objective for every mortgage lending credit union. It's not as simple, though, or as immediate as magic, however, these relationships take time, months, in fact to take hold. Begin working with your local Agents now; it will take 18 months for the relationship to blossom, We know of a few credit unions who made the commitment. Their Real Estate channel now accounts for as much as 15% of their monthly business.

Unsure how to begin? Talk with Shiela Finley (shiela.finley@PrimeAllianceRES.com), EVP, Prime Alliance Real Estate Services. PARES can help you build your 'Strange Bedfellows' strategy very quickly. Don't forget builders, and other influencers. Look for more information on creating these relationships later this year.

FHA Lending, Everyone?

dgreen@primealliancesolutions.com — 2008-06-19T10:56:48-07:00

Rather than say us older, let's say us more experienced Prime Alliance Team Members remember Government Lending. Not well, mind you, it's been some time since anyone's done much of it, and we are, well, getting older. Government Lending, FHA Lending specifically, is hip, it's happening, it's big. Some industry experts put FHA volume at as much as 30% of all lending in under 18 months. You've got to get ready. Yesterday.

What do you do? Three things concurrently. Get educated. Prime Alliance can help. If you attended Symposium and had the chance to see Tracy Ashfield's presentation on FHA Lending, you're ahead of the game. Didn't catch it? It will be on the Symposium DVD, due out later in June. SMS University is also holding two webinars in June so you can get the information. The next webinar is June 19 11:30 to 1:00 Pacific Time. SMS University will also be holding four face-to-face classes later this summer and early fall. For more information on all these sessions, visit www.consultsms.com. Prime Alliance customers receive a $50 discount on the face-to-face classes. When registering, use the Customer Discount Code 'PA'.

While getting educated, start the FHA approval process. The process isn't as arduous as it once was, yet it will take some time. Don't wait, contact HUD today at www.fha.gov. And, as soon as you've done that, partner with an FHA Lender that can give you a jump on Government lending. During Symposium we announced that CU Members Mortgage and Prime Alliance have joined together to bring you such a quick start program. Contact your account executive today for more information.

Still not sure Government Lending is for you? Consider this: former hard-money lenders, the subprime guys who refuse to give up, are turning their attention to FHA Lending as one significant way to replace the business they've lost. Don't let them get the jump on you.

Establish Community Housing Relationships

dgreen@primealliancesolutions.com — 2008-06-18T08:22:17-07:00

Strategy Number Three, Appoint a Housing Czar, emphasizes 'uncocooning' the mortgage department. Establishing community-housing relationships is a second strategy to expand our lending horizons.

Thinking about it, the mortgage transaction is a secondary transaction, one small yet essential piece of the main event: the purchase of a home. It begins before we get involved, and continues long after. Being exceptional lenders requires clear knowledge of the environment in which we're operating. Working with local agencies gives us a window into the needs, challenges and opportunities of our local housing market, valuable insight we must have as we define our strategies and structure our mortgage programs and products.

Where to start Local governments are often a good place. Housing is important in every community; it's a political issue everywhere because housing has been a national housing policy priority since the 1940s. City Hall should welcome your inquiries, especially with the type of lending help credit unions offer. They will also be able to put you in touch with local groups that have housing as either their primary or partial mission.

Mortgage Literacy: The New Mantra

dgreen@primealliancesolutions.com — 2008-06-16T16:23:47-07:00

One of the hardest lessons learned from the subprime crisis is this: the level of mortgage literacy in this country is abysmally low. How else could otherwise intelligent people end up in inappropriate loan products they couldn't possibly afford?  Credit unions were chartered to promote the responsible use of credit . While our education mission has always been important, the stakes have never been higher: people are losing their homes. Let's re-commit to member education, this time emphasizing housing finance. Members, and your communities, will thank you for it in the form of increased mortgage business.  This strategy dovetails nicely with the Strategy Number Ten, Be the Expert. Providing education that will help members make wise decisions is another way to position your credit union as a local expert.

Go Paperless

dgreen@primealliancesolutions.com — 2008-06-16T16:20:37-07:00

Fully electronic, completely paperless mortgage lending is here. PA lenders are some of the very few who can easily make the transition.

Why paperless? Three reasons. First, fully electronic lending keeps every party to the transaction fully informed in real-time. Credit union staff, whether in the main office, at a branch, working from home or away at a conference, are never out of touch, never wondering what happened with a particular loan, never questioning what to do next. Members find themselves in the same, informed position. "Is my appraisal finished?," is now a question you've answered before it's asked. Mortgage lending, once an information-starved process, is now information-rich. Everyone's up-to-date in real-time, on their terms. Go paperless for this reason alone.

The second reason, of course, is the greater efficiency, lower cost and better member experience that underlies keeping everyone fully informed. Electrons move faster than paper, always have, always will. Paperless lending will have you closing loans faster than you ever imagined.

Finally, paperless lending is environmentally friendly. Traditional mortgage loans consume three to five pounds of paper each. While this is an overly simplistic statement, every 600 loans we close devours 17 trees. Make your plans to go paperless with Prime Alliance's RLC and LFC. If you have them both, all you need to do is name a project team and engage the help of your PA Customer Care Team and Fannie Mae. Not using the LFC just yet? Contact your account executive today.

Be the Expert Be The Expert

dgreen@primealliancesolutions.com — 2008-06-13T09:17:21-07:00

Members and potential members are seeking trustworthy lenders, lenders that are reliable, that provide affordable, sustainable financing. That's the definition of a credit union.

It's time we position ourselves as our community(s) local housing and finance expert. This may not be as difficult as it seems. Start with your local media. Newspapers, radio and TV stations are always looking for opinion pieces and for knowledgeable industry experts to speak on timely topics. Mortgage lending is top of everyone's mind. Pitch story ideas such as mortgage relief (Strategy Number Seven), Government Lending (Strategy Number Fourteen) and First-time Homebuyer Education (Strategy Number Eight). The same topics will be of interest to the Real Estate Community, the Chamber of Commerce, The Rotary and other Community Groups. Now is not the time to be shy.

Pitch your story, be ready, be flexible and be informative. Before too long, your credit union will become the recognized local expert.

Focus On Niche Markets

dgreen@primealliancesolutions.com — 2008-06-12T07:37:38-07:00

Strategy Number Eight talks about first-time homebuyers as a core lending strategy for all credit unions. Niche Market lending is another such core strategy you should consider.

What do we mean by Niche Markets? It will be different for every credit union, and it depends on the community(s) you serve. Affordable housing, for instance, may be a niche that meets a major membership need. Emerging market lending, a strategy Prime Alliance has been promoting for more than three years, may fit your membership well. For an excellent example of a credit union that has executed an outstanding emerging markets strategy, click here to download the Consumers Credit Union Video. Consumers focuses on the Hispanic market, and their story is remarkable. The video will take less than five minutes of your time, the best, most strategic five minutes you'll spend today.

Credit unions have always been niche lenders. By another name we know niche marketing as SEG marketing or service to our sponsor groups. While the world has changed since the days of single SEGs, the concept remains the same. So does the execution. We've been exceptional at niche marketing since the 1930s, let's show our competition how it's done.

Focus On First-Time Buyers

dgreen@primealliancesolutions.com — 2008-06-11T07:40:10-07:00

First-time Buyers are a 'Two-fer' strategy: credit unions that embrace this strategy get a bonus. Here's how we figure it. Credit unions everywhere are looking for consistent, reliable sources of housing financing business. First-time buyers are a market niche tailor-made for credit unions. They're looking for information, education and convenience, three things at which we excel. We're looking for long-term member relationships. Once members become homeowners, their financial service needs blossom. Consequently, it's a perfect match. We'll close their mortgage, then proceed to help them with all their future needs.

The other benefit, the second part of the 'Two-fer' strategy, is this: first-time buyers tend to be younger, in their twenties and thirties. Credit union membership, as we all know, is getting older and, as people age they tend to borrow less and save more. If your credit union has a goal of lowering the average age of its membership, then adopting a first-time buyer strategy is completely complimentary.

As you begin work on your first-timer strategy, review Strategy Number Four, Your Product Mix. Affordability products will be important.

Credit Unions to the Rescue!

dgreen@primealliancesolutions.com — 2008-06-09T18:45:49-05:00

Credit unions differ from all other lenders, there's no disputing that. We didn't participate in the subprime Olympics nor did we put members in harms way. Members were and are affected, nonetheless. So are our credit unions. We can help.

If you haven't done so already, it's time to establish a sub-prime rescue program. Design a program, create a set of portfolio products and identify members who need help. In some cases members will identify themselves through delinquent car, home equity or credit card loans. The origin of their difficulties may well be an inappropriate first mortgage loan.

Another way of locating members in need is through Prime Possibilities. We can tell you the where, when and how of everyone of your home owning members financing arrangements, plus other, helpful information. This highly targeted marketing tool has many uses beyond sub-prime rescue, yet this a terrific way to get acquainted with this valuable service.

A note on creating subprime rescue products. By no means are we suggesting imprudence. A sad fact of the current crisis is there are members no one can help. Those we can, though, require a thoughtful, risk-based approach. Reserving against these loans at a higher level is also wise.

Lastly, the CU Housing RoundTable plans to produce a White Paper this summer on Sub-Prime Rescue. Look for more information on this project throughout the Summer months.

Fine-Tune Your Lending Operation

dgreen@primealliancesolutions.com — 2008-06-08T16:41:15-05:00

Several of your Prime Alliance Team Members are car guys. We fiddle and adjust constantly so they're always running their best. We know from experience that if we leave them alone for very long performance will decrease, imperceptibly at first, then all of a sudden, noticeably. Lending operations are no different.

PA's foremost car guy is also our foremost lending tune-up expert. Mark Jones is taking his Team's tune-up experience on the road, with Prime Alliance's Summer Road Show. This is one very timely and topical way we're helping you examine and tune your lending operation. For more information on dates and locations, click here.

Not sure you can make one of the Road Shows? No worries. Call you Prime Alliance Account Team. Your account executive and customer care manager are available to help; Fine-tuning is just a phone call or e-mail away.

Fine-tuning your operation delivers at least two benefits. First, you'll eliminate unnecessary steps, which will improve both your operation and your member experience. It will also lower your costs. Secondly, if you attended Symposium and had the opportunity to catch Kathy Elser and Nizar Hashlamon's presentation you know that lowering your origination cost is the one sure option you have for lowering your member's mortgage rate. Didn't catch their presentation? You'll find it on the post-Symposium CD, due out in late June.

Fine-Tune Your Member Experience

dgreen@primealliancesolutions.com — 2008-06-06T08:48:59-05:00

Together we revolutionized the housing finance experience. Our mutual innovations turned what once took more then eight weeks into a routine, two-week, mostly paperless, process. Closing a loan has never been easier. Prime Alliance credit unions deliver the best borrowing experience in the lending industry, that much we know. Let's not get complacent.

What to do? Go back to the beginning. Walk the member path as you did when your credit union first used Prime Alliance. Is it clear? Most certainly there are barriers to be removed, however small. Any step that could slow a member down, confuse them or cause them not to complete the process should be examined. Consider having a group of members participate in a focus group exercise, watch them walk the path, then make your adjustments based on their recommendations.

Looking for big adjustments? Probably not, since your member experience is already the best in your community. Striving for better, though, differentiates your credit union all the more.

Fine-Tune Your Product Mix

dgreen@primealliancesolutions.com — 2008-06-05T08:48:56-05:00

We're committed to cultural change, we've set our sights on a top three market position within three years. What's next? The right product mix for your members and your communities.

What's the right mix for the next eighteen months? Back to basics is our recommendation, mortgage lending, like high fashion, has gone retro. Conventional, conforming fixed rate and straight-forward adjustable rate loans are sexy for one simple reason: members understand them, and can affordably sustain them. Most people, with the exception of your more sophisticated borrowers, are done with the exotics. Another item for your menu: Government Loans. Don't miss Strategy Fourteen, it gives you the skinny on this important throwback mortgage product.

Don't forget, too, that affordability products remain important. It's easy to lose sight of the fact affordable housing and affordable lending remain a significant issue for our members and for our country as a whole.

Our portfolios are an important lending tool for this market. An astonishing prediction: by 2009 there will be 40% fewer mortgage brokers plying their trade, due, in part, to the fact that their sources of funds have or will all but disappear. Portfolio lenders, like credit unions, will take their place. The CU Housing RoundTable will publish a White Paper this Autumn entitled, "Re-imaging Your Balance Sheet". The Paper will address, in part, the product mix credit unions should consider, and the practical and prudent ways in which we can use our balance sheets to offer them.

Think simple, think affordable while fine-tuning your product mix.

Appoint a Housing Czar

dgreen@primealliancesolutions.com — 2008-06-04T08:21:57-05:00

Isn't it time for every mortgage lending credit union to appoint someone whose sole responsibility it is to concentrate on all things related to housing finance? We think so. Who is this person, the ideal candidate? An intense, caring, passionate, strategic individual who can execute yet also understands that housing is today's toughest economic challenge for most members. This is who you seek. Perhaps this person works in your mortgage department today. They may be hidden elsewhere in the credit union, however. Look high and low, in every nook and cranny.

'Passionate' is over-used as well as over-wrought. Yet we can't express fervidly enough the zeal with which the Housing Czar must pursue their mission. And a big mission it is. For most of our thirty years as mortgage lenders, the mortgage department has been cocooned, off in its own little corner of the credit union, doing its own thing, un-integrated with all other lending activities and unplugged from the broader world of real estate finance. One task facing your Czar is to bring mortgage lending into the bright sunlight of housing finance. This position's top-level responsibility? Drive the cultural and business changes necessary to make housing finance a front-and-center activity, a core, leading strategy for the credit union. Tangibly, this responsibility may take the form of an annual housing finance plan for the credit union, a plan that examines and explains the housing situations in the communities in which the credit union lends, explores the local real estate community and forms relationships, understands the mortgage programs and products necessary to serve the membership and ensures that systems and processes deliver the best member experience in the most efficient manner. Planning is step one. Execution is a more important second step.

The CU Housing RoundTable will be publishing a White Paper on this topic for release at its Third Annual Meeting on October 16 and 17 in Seattle. In the meantime, appoint a Czar and get busy on the plan. Eighteen months will pass before we know it.

Top Three in Three

dgreen@primealliancesolutions.com — 2008-06-03T09:30:00-05:00

The most successful lenders know their current market position. They also know their desired position. Choose yours. Prime Alliance suggests determining where you'd like to be in three years. Set interim goals for 12 months and 24 months so progress is easy to monitor on your way to your three year goal. Measure dollars and measure the number of loans. Both metrics are important. Units help you track the number of members you've helped become homeowners. This is also the best way to track productivity.

The first step? Knowing your present market position. It's easier than you think. The CU HousingRoundTable's Two to Ten White Paper discusses this topic in detail. In addition to learning your current market position, you'll get a valuable first-hand look at your competition.

Shoot for a top three spot within three years. The time is now. For the next eighteen months we'll experience the best market in the thirty year history of credit union mortgage lending. We should know: several members of your Prime Alliance Team have been lending through most of that time. Trust us, we've not seen a more favorable market, nor a stronger opportunity.

Make Your Culture a Housing Finance Culture.

dgreen@primealliancesolutions.com — 2008-06-02T20:35:28-05:00

It's time for Housing Finance, what we once thought of as mortgage lending, to become a dominant culture in every credit union. Becoming our members' source of affordable,
sustainable, stress-free home lending is critical to their financial well-being our relationships with them, as well as for the vitality of our credit unions. 

 Much has been written about the opportunity we've been presented with. Consider this: $1 trillion of origination capacity disappeared in the last twelve months, much of it never to return. Where will members turn? Their credit union. Let's be there for them. The first step is credit union-wide commitment to housing finance as a driving, long-term, core strategy. Then your credit union must live the strategy. Cultural change has been cited by the CU Housing RoundTable as the crucial, first-step to becoming our members' housing lender of choice. Their suggestions for navigating such a change can be found in their Two to Ten White Paper, available at www.cuhousingroundtable.com/two-to-ten.pdf. 

 Another excellent source of information is the presentation Bryon Nabors made on cultural change at this year's symposium. Mr. Nabors is Vice President of Training and Development for GTE FCU. It's available for download at www.primealliancesolutions.com/culture/nabors.pdf. 