SCOTTSDALE, Ariz. (3/23/12)--CU Realty Service LLS , a credit union service organization has released a white paper: "A Credit Union's Guide to Increasing Purchase Mortgage Share Through Real Estate Services."
"With home prices and interest rates at extremely low levels, credit unions are well-positioned to capitalize on these conditions," said CU Realty Services Chief Executive Officer Mike Corn. "Yet, they continue to struggle to capture their share of the purchase mortgage market."
The paper highlights the challenges that members, credit unions and real estate agents face during the real estate transactions. Among the challenges credit unions face:
- The credit union is not the buyer's first point of contact in the mortgage transaction;
- The credit union does not have strong relationships with real estate agents;
- The credit union does not have a real estate marketing channel;
- Members don't think of the credit union as a place that offers mortgage services;
- Members pre-qualified by the credit union often end up going to other lenders;
- The credit union has limited means of saving money for a member on a transaction; and
- The member chooses a lender before the credit union is aware of the need.
The paper highlights the concept of "first point of contact" within the real estate transaction. An overwhelming number of home buyers and sellers rely on their first point of contact, typically a real estate agent, for everything related to the transaction, and including securing the financing.
This works against credit unions, because agents tend to direct clients to their preferred lenders, according to the paper. One way to overcome this disadvantage is to create a network of real estate agents who understand and service member needs while protecting credit unions' mortgage interests. Doing so, credit unions can increase their mortgage volume by up to 40%, according to CU Realty Services.