Member First Mortgage, not yet a year old, readies to expand its CUSO business

GRAND RAPIDS, Mich. – Member First Mortgage has had its doors open for business for only nine months, but the CUSO is already in the late stages of negotiating with other credit unions to have ownership interest in the mortgage lending CUSO. When Member First Mortgage was incorporated on Sept. 11, 2001, President Cory Mackwood said the business plan allowed for seven owners of the CUSO. The charter owners were Steelcase Employees CU, Grand Rapids; LSI CU, Grand Rapids, and Bay Winds FCU, Charlevoix. It recently brought in Community Choice CU in Livonia, Mich. The CUSO will decide within 90 days which three credit unions will fill the remaining three slots. “Unless we decide as a company to allow for more owners, any other credit union that’s interested in doing business with Member First Mortgage will have to do so under affiliate status,” said Mackwood. Those CUs would have “Class B” ownership and receive compensation based on what they produce, but they wouldn’t have voting rights nor be involved in strategic decisions for Member First Mortgage. Mackwood added that, “If the right partner comes along, we will more than likely offer additional ownership slots, but that’s not guaranteed.” He said the CUSO would consider a CU’s commitment to mortgage lending excellence and their geographic location in making its determination. “Our objective is to become the dominant mortgage lending player in Michigan, so if we have interested members outside of Michigan, that could be of interest to us,” Mackwood said. Member First Mortgage currently offers loans for vacant land, construction permanent, first mortgages on existing homes and refinances. Based on the number of loans its originated so far, Mackwood said Member First Mortgage origination volume projections for the year are $50-$60 million. That’s three times what the CUSO originally estimated. In October it originated close to $10 million in loans. Mackwood is proud of those numbers. He’s also proud that the number of members currently served by the CUSO – 140,000 members – is more than threefold what it was when the CUSO started – 45,000 members. Once the additional three credit unions that will have an ownership interest in the CUSO are named, Mackwood said the number of members served will increase to between 250,000 and 300,000. “All that in just nine months,” he said. “Mortgage lending has become the core product for forward thinking credit unions,” said Mackwood. “Most small credit unions still aren’t aware of that.” He considers Bay Winds CU which has about $50 million in assets, to be unique in its appreciation of mortgage lending benefits for credit unions. Though not yet a year old, Member First Mortgage already has its sight set on some additional services it wants to expand into next year, such as offering real estate brokerage operations and becoming a full service title insurance agency. “CUSOs have to continuously look for additional revenue sources to drive their profits,” said Mackwood. To those credit unions that are still sitting on the fence deliberating whether to get involved in mortgage lending, Mackwood strongly advises them to “just do it, it’s where your members are.” He added that, “Just make sure you do it in a way that lets you compete with your largest competitors, that is the banks and mortgage brokers.” -