Small CUs missing boat on mortgages, ACUMA told

<p>SCOTTSDALE, Ariz. – Small credit unions are missing out on a productive revenue stream by steering clear of mortgages, opines the head of a Pennsylvania CU which has developed a 16-year-old CUSO-based mortgage business. Addressing the annual American Credit Union Mortgage Association Conference here, John Unangst, president and CEO of $229-million Franklin Mint Federal Credit Union, Broomall, Pa., urged CUs to look closer at offering mortgages as a way to build close member ties and create “real profits for your institution.” “I think the mortgage banking industry,” declared Unangst, “has made it appear harder than it actually is” to originate and service mortgage products. Unangst, who was joined on the program by Ruth E. Kauffman, vice president and director of mortgage services for the Franklin Mint CUSO, State Financial Network Inc., urged small CUs to take advantage of CUSOs like his which have the mortgage expertise to help the balance sheet. Some credit unions find themselves “building a big staff” and acquiring the software for a jump into originations, “and then the market falls and they find their staff twiddling their thumbs.” But retaining the experience “and focus” of a CUSO like State Financial can put a small CU on the right track and avoid needless expense, said Unangst. In her remarks, Kauffman disclosed plans for State Financial to become “more aggressive” in its mortgage program for CUs with plans to “increase our credit union partners by 50% over the next 18 months.” State Financial currently has 19 CU contracts of which she described 14 as “active” agreements. “Our plans are to add seven new clients,” she told the ACUMA conference, noting also State Financial in September hired a business development officer and also added a second member of the origination support staff. The Franklin Mint CUSO provides to CUs loan originations, processing, underwriting, closing and various consulting services including quality control and portfolio review. SFN’s goal, she said, is to help increase the industry’s “overall capture rate of only 2% of the mortgage market.” The hiring of a business development officer, she said, “should go a long way in igniting interest in a product known to increase loan-to-share ratios and cross sell opportunities.” Moreover, the SFN program represents “a sound way to meet the goals of many credit unions asset liability management needs.” -</p> <p>[email protected]</p>