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How to Get Your Share of This Year’s Mortgage Market
Monday, May 9, 2016 6:25 AM

By Ben Weismer, CUNA Mutual Group

The 2016 summer home buying season promises to be robust. And credit unions are in an excellent position to capture a greater portion of the mortgage market—if we’re ready to handle the volume, coach members through the process, and help them protect their biggest investment.

Here are three key drivers that spark optimism for the upcoming spring and summer mortgage activity, gleaned from the February 2016 Credit Union Trends Report1:

  1. The housing market rebound continues
    Credit union mortgage loan balances increased more than 8 percent in 2015, the fastest increase since 2008. First mortgages comprised 28.2 percent of all credit union loans at year-end 2015, up from 22.6 percent in December 2007.
  2. Members are saving more
    Credit union members’ total savings balances rose to 6.8 percent during 2015—the fastest pace since the Great Recession of 2008-2009. More prospective homebuyers are likely to have the capital to cover the down payment necessary for traditional mortgages.
  3. The job market continues to improve
    CUNA Mutual Group Economist Steven Rick expects the U.S. economy to reach full employment by the second quarter, encouraging potential homebuyers to jump into the housing market.

FEAR: A Roadblock to Mortgage Growth

Even with the improving economy and continued low interest rates, some members may be reluctant to buy a first home or upgrade to a more valuable home. For many, the housing market crash of 2007-2008 may still be fresh in their minds.

Address this challenge head-on by proactively reaching out to potential homebuyers more assertively in 2016. Show them your mortgage operation is the antithesis of lending practices that triggered the crisis nine years ago.

For example, host homebuyer seminars that focus on guiding homebuyers to make informed decisions.

Use multiple forms of media—including social—to reach your members online and in traditional channels. Develop your mortgage staff’s skill set on engaging mortgage applicants in consultative discussions. Rather than simply processing their applications and documentation, have an open discussion about their financial situation, their monthly budget, and the true costs of home ownership.

Well-trained staff members who are willing to spend more time up front with members may discover opportunities to refinance auto loans, transfer or consolidate credit card debt, and offer protection solutions. In doing so, they can save members considerable money down the road, while giving them more monthly breathing room for a house payment.

Help Mortgage Applicants Protect Their Investments

Insurance is another area prospective homebuyers may need help understanding. Don’t assume they truly know the difference between private mortgage insurance (PMI), homeowners insurance, and mortgage payment protection.

Knowing how each of these products work is essential. Some homebuyers may believe, for example, that PMI will pay their monthly mortgage payment if they become disabled or unemployed. They may believe that if a breadwinner dies, PMI will allow a surviving spouse to stay in the home.

Be sure prospective homebuyers who are required to have PMI know that PMI protects the lender while mortgage payment protection protects the borrower.

If your credit union allies with mortgage payment protection and/or homeowners insurance providers, your lending staff should be educated about these products so they can inform members. This could differentiate your credit union in the mortgage lending marketplace. It could also create a non-interest income stream to bolster your credit union’s bottom line.

Traditionally, credit unions are a trusted source for financial products. Trust has never been more important in the mortgage market than it is now. Use that. It’s a built-in advantage, and it could really get this summer moving season moving in the right direction—yours.

Ben Weismer is the product manager for mortgage payment protection at CUNA Mutual Group. He can be reached at Ben.Weismer@cunamutual.com or 608.665.8503. For more information on mortgage payment protection and other products, go to cunamutual.com/mpp.

1 “Credit Union Trends Report,” February 2016, CUNA Mutual Group. Data source: CUNA Economics & Statistics and CUNA Mutual Group – Economics.

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Mortgage Payment Protection is the marketing name for Group Mortgage Protection Insurance which may include Life and Disability Insurance underwritten by CMFG Life Insurance Company and Involuntary Unemployment Insurance underwritten by CUMIS Insurance Society, Inc. Life, Disability and/or Involuntary Unemployment are not available in all states.