First Carolina Corporate FCU Goes off the Beaten Path to Help its Members With Mortgages

GREENSBORO, N.C. – First Carolina Corporate has inked an intriguing deal with a firm that should help more credit unions in the Carolinas offer mortgages. “Every credit union in order to grow their business needs to be a mortgage lender. This is not typical of our products, but if credit unions aren’t generating loans, we’re not going to do as well. We’re looking for ways to help out,” said Dave Brehmer, president/CEO of the $1.2 billion First Carolina Corporate CU. First Carolina Corporate is teaming with mortgage originator Homeowners Mortgage Enterprises to provide mortgage services to CUs in the Carolinas. The deal includes another major credit union mortgage player in Prime Alliance, the mortgage CUSO of Boeing Employees CU which developed what Brehmer calls a “slick” online mortgage tool that is integrated with Fannie Mae. “This product can be helpful at all levels. Even a credit union that has a full mortgage department can benefit from the automation. On the other hand credit unions not into mortgage lending can get into it with this,” said Brehmer. Brehmer said CUs can choose to keep the mortgage on their books or not on the books, and retain the servicing or not retain the servicing – it’s up to them. Prime Alliance and Homeowners Mortgage Enterprises already had a relationship, which they inked last year. The Prime Alliance solution gives CUs the ability to originate mortgages via their Web site. Origination is not only through the CU, but can be sent to originators such as Homeowners.One key to the deal is that CUs don’t have to worry about their members being marketed by Homeowners for other products since it only deals in mortgages. As for First Carolina Corporate, it has no hard dollar financial commitment with this deal, but plenty of staff and time committed. “Our role is working with the credit unions and helping them understand mortgage loans. Our entire business development staff has been trained on the program and we’ll be holding town meetings and really selling credit unions on the system. We’ll also be working with them to increase their internal mortgage expertise and marketing mortgages,” said Brehmer. With an existing deal with Prime Alliance and now this deal with First Carolina Corporate, Homeowners Mortgage Enterprises has found a nice piece of business with credit unions. The 82-person company plans to hire 40 more employees over the next 12 months and described this as a major contract. The company is expected to do $550 million in mortgage originations this year. First Carolina Corporate benefits from another source of fee income, which is becoming increasingly important for corporate credit unions as margins get tighter. “We make fee income, not if we just sign up credit unions, but if they’re producing mortgages. If they’re not, we don’t get anything. What I like is there is a tie in. We’re all kind of looped together,” said Brehmer. While the credit union will make the lion’s share of the money, First Carolina will get a “small percentage of the processing and underwriting fees” said Brehmer. [email protected]