Kansas City Gets its First Mortgage CUSO, Jointly Formed by Two Credit Unions

LENEXA, Kan. – CommunityAmerica CU and Mazuma CU, both of which have offered mortgage services on their own, have partnered to form the first mortgage CUSO in Kansas City. The new CUSO – TruHome Solutions – is co-owned by CUSO One, a wholly-owned subsidiary of CommunityAmerica CU which holds a Missouri charter and is headquartered in Lenexa, Kansas, and CU Holding Company LLC, a wholly-owned subsidiary of Mazuma CU, Kansas City. Keith Varney, who has worked at CommunityAmerica as director of that credit union’s mortgage lending program for more than four years and was appointed chief operating officer of TruHome Solutions, said CommunityAmerica and Mazuma “saw a need for credit unions to be able to gain expertise in mortgage lending without having to absorb the cost of staffing, adding technology and putting necessary systems in place. Finding people who have expertise in mortgage lending can be difficult and is very costly. They decided the best venue to provide mortgage services to credit unions in this market is through a CUSO. It’s hard for most credit unions to put a mortgage program together like this on their own.” Varney explained that prior to forming TruHome Solutions, CommunityAmerica originated its own mortgage loans but outsourced the servicing of the loans. Mazuma, conversely, outsourced the loan originations but the CU serviced the mortgage loans itself. “In both cases, the credit unions were unhappy with the outsourcing pieces because they each felt the vendors they used didn’t provide the level of customer service the credit unions required. So they decided to pool their resources to form the CUSO,” said Varney, who has 20 years mortgage lending experience behind him. For now, TruHome Solutions is calling CommunityAmerica’s headquarters its home, but Varney said the CUSO will eventually be moving into its own facility. In addition to him, the CUSO staff includes the 14 employees of CommunityAmerica who handled the CU’s mortgage originations, plus 10 people who are new hires and will handle servicing. Varney says the staff has an average eight years experience among them. Ownership of the CUSO is split 70/30, CommunityAmerica/Mazuma, said Varney. He explained that since Community America with $1.4 billion in assets, is larger than Mazuma, “CommunityAmerica contributed the most margin to the CUSO so that makes them the biggest owner.” TruHome Solutions intends to start out providing mortgage services to CommunityAmerica’s and Mazuma’s members, but the goal is for the CUSO to offer mortgage origination and services to other credit unions under a private label program so a member will see its credit union’s brand. TruHome Solution’s board is also discussing opening up ownership in the CUSO to other credit unions. CUSO One President Jeff Kline said TruHome plans to add a title company and realty services within 18 months. The objective, he said, is to give credit unions “in this region the first A to Z true-home solution for members.” By offering those services to credit unions that don’t have the capital to put a mortgage program in place for themselves, said Varney, TruHome Solutions will provide members with a true front and back end mortgage process that will handle everything for them from the day they buy or sell a home to the last day, to servicing their loan. He explained that for any credit union that uses TruHome’s services, it will be up to them whether to retain the mortgage in their portfolio and to decide it they want to retain the servicing rights or have TruHome handle it. TruHome will also assist credit unions with selling their mortgages on the secondary market. Varney is confident TruHome Solutions will be able to offer credit unions better mortgage services for their members than other credit union mortgage providers such as CUNA Mutual Mortgage and PHH Mortgage Services. “If we can provide better service at a better price, then I would feel confident going to any credit union and offering them TruHome services,” he said. -