PINE BROOK, N.J. — Michael McGrath, president of CU National Mortgage and its parent company, US Mortgage Corp, has been appointed to the Fannie Mae Customer Advisory Board, giving CUs their first presence on the influential board. CU National Mortgage is a mortgage product and service provider to credit unions nationwide that serve over 100 credit union clients. The company (http://www.cunational.com) closed over $1 billion in loans last year, said McGrath.
McGrath said his primary focus was to bring to the board a perspective from the credit union side, particularly that of small to mid-sized credit unions and the obstacles they may face in offering mortgage programs to their members. But McGrath said he was optimistic, given that Fannie Mae is supportive of the CU niche and looking for ways to expand and/or enhance mortgage programs at credit unions.
"I attended my first meeting in March and came away very impressed," McGrath said. "The board meets semi-annually for two days, so discussions are very intensely focused. It's a high-level group of people that can be very influential; the top executives at Fannie Mae and economists that are looking for a contribution from industry people to pinpoint current trends in the marketplace. The recent debacle in subprime lending is an example and was talked about. I know there are banks represented, but this is a chance for me to bring my knowledge and experience of working with credit unions to the board. And credit unions, from the smallest faith-based CU to the very largest CU making mortgages are important to the overall picture. I can help bring them to the 'inner circle' so to speak, and if it can help guide future policy at Fannie Mae, then great."
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McGrath said he was very much a proponent of the idea that just about every credit union should be making mortgage loans. Why some 40% are only doing so has always been a source of consternation for him. "That's always been a big challenge. The initial hurdle is just the fear of the process, I think. Credit unions have traditionally been perceived as auto lenders, small loan providers, home equity loans and such, but the difference between a $15,000 loan and a $300,000 loan can be a leap for some. And there are myriad compliance issues to be dealt with. Still, we approach every credit union one at a time and it's not unlike having to tear down a wall. We just have to get past it, that's all."
McGrath said his experience showed him that the CUs that succeed are the ones that are enthusiastic about participating and the worst are those who pay mere lip service to their mortgage program. "I think many credit unions that aren't involved are beginning to see that the cross selling of other services that come from the initial mortgage, like checking, direct deposit, HELOCs, credit cards and so on have become essential to their long term survival. The naked truth is that if a member doesn't get a mortgage at their credit union they go elsewhere and some of that connection is lost, maybe forever."
He said he'd like to see Fannie Mae take on a larger role in offering some help to those "wrongfully put in subprime mortgages by the vultures out there. I look forward to being a true leader on this board to create the loan packages necessary that will help members achieve the American dream of owning a home."
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