GREENVILLE, S.C.–There remain some strong opportunities to grow lending, and even in a rising rate environment mortgages are one of them, said one person.
Speaking to NAFCU’s Strategic Growth Conference, Beth Eller, VP-mortgage services with Truliant Credit Union in North Carolina, said housing demand will remain strong even as the market adjusts to higher interest rates.
While the refinancing volume will decline, the purchase mortgage market will remain robust, she forecast.
“Thirty-four percent of existing home sales last year were to first-time home buyers,” Eller said. “If you can get to that first-time homebuyers, they are what propels the market up.”
Member Application Experience
The key to capturing mortgage loans is realizing that speed and ease of use is everything to a member today,” according to Eller.
“Mortgage lending is not easy; it’s very detailed. But there are some things you can adapt that will give you some help,” she said.
Among those things, said Eller, are GSE acceptance of automated vendors; marketing to members using digital and traditional channels (“it has to be educational, and it has to be relevant”), and web- and member financial center-based applications.
Eller, who said she has worked for 34 years in mortgage lending, said the only real innovation she has seen during that career has been e-closings, in which Truliant is active.
She said the credit union has now done about 200 full e-closings and one remote closing.
Member Application Experience
There are two types of e-closings, Eller explained:
- IPEN: In-person electronic notification
- RON: Remote online notification. “This is fully remote. The borrower is in their home, the attorney is in his office with the notary, and we are in our office,” said Eller.
The costs related to e-closing, she explained, include having an eVault (into which documents are transferred in and out), a document provider (Truliant uses DocMagic) and a settlement provider.
Eller said the typical e-closing takes about 20 minutes.
The Benefits
According to Eller, the benefits include faster recording and disbursement of funds, a premium on security, accommodation of tech-savvy Millennial buyers, an increase in the number of closings, better loan quality, reduction in compliance risk, and an improved buyer experience.
Looking Forward
Looking forward, Eller said Truliant FCU will continue its focus on first-time and low- to moderate-income borrowers. The credit union has also focused on being a preferred lender in a particular development, or in cases where apartments being converted into condos.
It is also involved in niche lending “with prudence.”
Eller said she expects 3/1 and 5/1 ARMs are going to shrink in the market due to a pending CFPB rule, unless a solution is found.
“Nobody wants ARMs right now, but we’re going to see that start to change,” Eller said.
She added credit unions have an advantage in being able to portfolio loans, while the Rocket Loans of the world can only sell what others can buy as they don’t have ability to put mortgages in portfolios.
The Question
The other questions credit unions need to watch, she said, has to do with the fact that the refinance wave is largely over and it’s uncertain whether those buyers will look to move.
“Are they going to stay in homes and pay off loans?” she asked. “It will be interesting to see. It’s going to be a robust market, just not as robust as it has been.”
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