SOURCE: Mortgagebot

October 02, 2008 10:00 ET

Credit Unions Buck Trend; Remain Solid Despite Mortgage Meltdown

Even Smaller Credit Unions Are Growing Mortgage Business; Mortgagebot CU Clients Confirm Research Citing 53 Percent Growth in Mortgage Originations

MEQUON, WI--(Marketwire - October 2, 2008) - The subprime mortgage meltdown continues to have ripple effects throughout the economy, but a too-often-ignored bright spot in the mortgage industry is just down the street: the local credit union. And in a society in which 70 percent of all mortgage shoppers start their mortgage searches on the Internet, credit unions of all sizes -- even smaller ones -- are citing the online channel as a key factor in the unprecedented growth of their mortgage businesses.

New reports from mortgage-technology provider Mortgagebot® LLC of Mequon, Wis. (www.Mortgagebot.com) are shedding more light on the rapidly expanding role credit unions are playing in today's mortgage industry. And Mortgagebot should know -- the company leads the industry in providing consumer-direct point-of-sale mortgage-origination solutions to credit unions: its list of nearly 800 clients features almost 300 credit unions -- including about half of the nation's "top 100."

"With subprime lenders out of the way, and few mortgage brokers on the street, more mortgage applications are coming straight to the credit union," said Dean Clark, Real Estate Lending Manager at Tampa Bay Federal Credit Union in Tampa, Fla., an 8-branch, full-service credit union with $331 million in assets.

Clark cites the implementation of an intelligent, online mortgage-application solution from Mortgagebot as a key factor in his organization's remarkable mortgage growth. "Mortgagebot PowerSite has helped us triple our application volume and reduce our average processing time by 33 percent -- without having to add personnel. Our online mortgage department is open 24/7, and its intelligent functionality walks members through the mortgage application process step-by-step. So they get the answers they need to apply with confidence, whenever it's most convenient for them."

This kind of mortgage success confirms recent credit-union research from the consulting firm Callahan and Associates, which reveals that credit-union mortgage originations in Q1 2008 were up by 53 percent over Q1 2007 -- a period during which the Mortgage Bankers Association (MBA) says that national overall mortgage originations dropped by 24.6 percent.

Credit unions: at the center of an online mortgage "revolution"

"Credit unions continue to fully serve members at a time when many have retreated from the [mortgage] market," said Chip Filson, President of Callahan and Associates, in a recent news release. "They have healthy balance sheets, and remain active lenders with ample liquidity." Filson also characterized the shift toward credit unions as a mortgage-industry "revolution."

"The online mortgage channel has truly 'arrived,'" noted Scott Happ, Mortgagebot President and CEO. "And it's especially obvious among America's credit unions. New research from Deloitte Consulting indicates that about 7 out of 10 mortgage shoppers start their searches online; and as long as interest rates remain at near-record lows, people will keep shopping for low mortgage rates. That's why more and more credit unions are meeting their borrowers online."

"Credit unions are adopting our online, POS [point of sale] mortgage-origination technology at a rapid pace. We've gained nearly 50 new credit-union clients in the last 18 months, and more than 80 percent of them have under $500 million in assets," Happ stated. "This indicates that even America's smaller credit unions understand the market has changed -- and they don't want to be left behind. To be competitive they know they must wholeheartedly embrace the online mortgage channel."

Happ noted that the forward-thinking credit unions that have recently joined the Mortgagebot client family include:

--  OnPoint Community Credit Union (Portland, Ore.; $2.6 billion in
    assets)
--  DFCU Financial Federal Credit Union (Dearborn, Mich.; $1.9 billion)
--  First Community Credit Union (Ellisville, Mo.; $1.2 billion)
--  Nassau Educators Federal Credit Union (Westbury, N.Y.; $1.2 billion)
--  Gesa Credit Union (Richland, Wash.; $630 million)
    

Online mortgage origination technology: "The time is now"

It's not surprising that large credit unions are leaders in adopting online POS mortgage-origination technology. After all, they are under relentless pressure to maximize efficiency, integrate business channels, reduce costs, and increase loan volume.

But what's noteworthy about today's mortgage marketplace is that smaller credit unions are increasingly implementing scaleable, affordable, high-tech mortgage-origination systems -- and they're gaining the same benefits as their larger brethren.

"We were a small credit union with only two people on our mortgage staff," said Linda Boe, Mortgage Supervisor at Louisiana Federal Credit Union, a three-branch, $115 million credit union in LaPlace, La. "Our volume was growing, but we were limited by having to take mortgage applications by hand. Implementing Mortgagebot alleviated that problem for us."

"Credit unions control only a small percentage of the mortgage market, so they frequently implement new technology to compete," observed Dan Welbaum, Mortgagebot's Chief Marketing Officer. "But online lending is truly a transformational technology. And with interest rates low and most consumers doing their mortgage shopping via the Internet, smaller credit unions are integrating the online channel into their mortgage operations."

"The first month we implemented Mortgagebot PowerSite, we had four 'hits' on our new Web site and got two completed applications," recalled Boe. "The second month we got 12 hits and 10 applications. Now we get 40 to 60 hits per month, and about 80 percent of them result in closed loans. The bottom line is that Mortgagebot has helped us more than double our loan production -- and we still have only two people in our mortgage department!"

"We're very pleased with the way Mortgagebot PowerSite saves us time and money," said Boe. "It basically does the work of about three people for us."

Mortgagebot leadership: Integrated channels, enterprise-wide deployment

What's drawing today's credit-union mortgage lenders to Mortgagebot? The Mortgagebot PowerSite product suite.

The award-winning PowerSite is a fully configurable, private-labeled, consumer-direct solution set that enables lenders to take mortgage applications enterprise-wide: consumer-direct via the Internet, or through a branch, call center, or professional loan officer. PowerSite's intelligent, interactive workflow enables borrowers to complete an entire mortgage application, get pre-approved, and receive disclosures in as little as 20 minutes or less.

"Credit-union mortgage lenders are turning to Mortgagebot because they need a common, enterprise-wide point-of-sale solution to efficiently integrate all of their origination channels," said Welbaum. "They're using our PowerSite products to gain new members and grow their businesses."

"We take our mortgage business seriously," said Clark. "We're very competitive, and we were seeing positive net growth every year. But since our full implementation of Mortgagebot PowerSite, our business has really taken off. In just the first quarter of 2008, our application volume exceeded our entire year of 2007. That's because our Web-based application has opened up our market into the entire state of Florida, and we're gaining a lot of new members as loan shoppers visit our Web site and see mortgage products they like."

About Mortgagebot

Mortgagebot LLC (www.Mortgagebot.com) is the Inc. 500 company that leads the industry in providing consumer-direct, Internet-based mortgage-origination solutions to credit unions and banks nationwide. Mortgagebot combines its mortgage expertise with leading-edge "software-as-a-service" (SaaS) technology to create robust, scaleable, and affordable mortgage Web sites for nearly 800 lenders from coast to coast.

Mortgagebot's flagship product suite is the award-winning Mortgagebot PowerSite product family, a fully configurable and completely private-labeled solution set that enables lenders to take mortgage applications enterprise-wide: consumer-direct over the Internet, in the branch, through the call center, or from a professional loan officer. PowerSite's intelligent and interactive POS functionality enables borrowers to complete an entire mortgage application, get pre-approved, and receive full disclosures in as little as 20 minutes. And because PowerSite solutions are deployed via the Internet, there is no PC software to install and maintain.

Mortgagebot also provides Mortgage Marvel® (www.MortgageMarvel.com), the revolutionary, easy-to-use mortgage-shopping Web site that instantly delivers accurate, anonymous mortgage quotes from lenders nationwide.

Mortgagebot, Mortgagebot PowerSite, and Mortgage Marvel are registered trademarks of Mortgagebot LLC. All other trademarks are the property of their respective owners.