Spirits Unleashed

Transcription

Spirits Unleashed

ACUMA
PIPELINE
January • 2015
MAGAZINE
U.S. Macro Outlook 2015:
Spirits Unleashed
By Mark Zandi n Page 30
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Table of contents
2
CU Mortgage Lending, A real alternative for members
4
In the Pipeline: Insights and Observations on CU Mortgage Lending
By Bob Dorsa
4
Mortgage Insurers Start the New Year with New Master Policies
By Arch Mortgage Insurance Company
ACUMA 2015 Annual Conference
September 14-16, Bellagio Las Vegas
Saving for a Downpayment Takes Time and Sacrifice, but the Payoff Remains
By Jessica Lautz
ACUMA’s Exhibit at the 2014 NAR
By Bob Dorsa
Efficiency to its Mortgage Process
By Bob Dorsa
May 20-21, San Francisco – June 30-July1, Boston
6
7
8
10 Credit Union Uses eRegistry for eNotes to Bring 21st Century
13 ACUMA Sets new record for 2014 Annual Conference Attendance…
18 ACUMA 2015 Real Estate Lending Workshops, Why Should You Attend?
20Millennials: Challenge and Opportunity
By Ann Clurman and Rob Callender
30U.S. Macro Outlook 2015: Spirits Unleashed
By Mark Zandi
40The Intricate Art of Today’s Mortgage Underwriting
By Jerry DeMuth
46The Infrastructure Predicament
By Terry Wakefield
55Market Share–Credit Unions Are Holding On!
By Tracy Ashfield
January 2015 - PIPELINE 1
From the desk of ACUMA PRESIDENT BOB DORSA
ACUMA
PIPELINE
MAGAZINE
CU Mortgage Lending
A real alternative for members
As I watched the President’s State of the Union message this week he reminded us of the tough times our nation has endured the past few years. It is great news that
our economy is back on track and the future is once again
bright for many.
From our corner of the world, the recognition that
Credit Unions are perhaps the only real alternative for consumers seeking competitive housing finance options.
Since ACUMA began in 1996 this has been a resilient theme propelling us forward. More and more Credit
Unions have discovered that home loans are the key driver
for financial security and member satisfaction. We have
witnessed in the past decade our market share rise from
a mere 2% at the beginning on this century to above 8%
today and constantly rising to our 10 year goal to reach double digits by the end of next year.
While achieving goals are most important to business leaders, in the case of Credit
Unions assisting borrowers with home loans speaks to the fundamental fabric of our business, dating back to our origins. The updated version would be instead of pooling funds in a
single sponsor or affinity group, Credit Unions have found a real niche originating and more
importantly servicing those loans in the communities in which they serve. This comment
was echoed by the President of the NAR at ACUMA’s Fall Conference. Brown also reflected
on the parallel in what Credit Unions do best to what REALTORS® do best, serve the community in which they live, work and share.
We had many conversations this past year around the topic of working with Realtors. I
content we may be over thinking this issue. If we just get back to basics we have more in
common with Realtors than we know. Now is the real opportunity. We have an entire new
generation of younger borrowers entering the home-buying marketplace. Many of these individuals may not be that familiar with what Credit Unions offer. I see this as the perfect introduction. Working together with REALTORS® in your community you can provide valuable
information and trust sought by just about every borrower. In return securing the loan will
give your organization an opportunity to grow based on leveraging the business relationship
with the borrower for additional CU products and services.
So the table is set. ACUMA works hard each every day to make this job a little easier.
Whether exploring building relationships through the National Association of Realtors to
providing outstanding education to learn from professional and peers alike those all important best practices to success. There are no shout cuts but we know our devoted professional
real lending professional have a resiliency second to none. I look forward to speaking with
many of you and seeing some you at our 2015 Educational events. It doesn’t get much better
than this!
Respectfully,
Bob Dorsa,
President/Founder
2 PIPELINE - January 2015
ACUMA Pipeline is a publication of the
American Credit Union Mortgage Association, PO Box 400955, Las Vegas,
NV 89140.
Bob McKay
Baxter Credit Union
Chairman
Mark Wilburn
Truity Credit Union
Vice Chairman
Pam Davis
Delta Community CU
Treasurer
Barry Stricklin
Tower FCU
Secretary
John Reed
Maine Savings FCU
Director
Tim Mislansky
Wright-Patt Credit Union
Director
Michael Patterson,
Financial Partners
Credit Union
Director
Bob Dorsa
President
The information and opinions presented here should not be construed
as a recommendation for any course
of action regarding financial, legal or
accounting matters by ACUMA, The
ACUMA Pipeline or its authors.
© Copyright 2014 by ACUMA.
All rights reserved.
Printed in the USA
Join us
Pictured above: ACUMA President Bob Dorsa and Tracy Ashfield.
Why
should you join ACUMA? Because, just like you, we realize the importance of
CU mortgage lending to the future of the credit union movement. ACUMA is:
v an association whose only mission is CU mortgage lending with a membership made up
exclusively of credit union professionals and their primary suppliers.
v dedicated to serving the mortgage needs of both current and prospective credit union
members and their families.
v a committed advocate of CU mortgage lending constantly promoting the benefits of our
programs and the value of membership.
v actively working to build relationships with REALTORS®, Home Builders and other influential
housing affiliated groups.
v the single most powerful resource available when it comes to networking, relationship
building and growing your market share.
Join us today at
www.acuma.org
In the pipeline: Insights and observations on CU mortgage lending
Mortgage Insurers Start the
New Year with New Master Policies
By Arch Mortgage Insurance Company
The Great Recession launched an era
of sweeping change for the mortgage
lending industry – change that is still
unfolding as we move into 2015.
Mortgage lenders, including credit
unions, naturally felt the greatest impact as new regulations and safeguards
were introduced to the home purchase
process and mortgage finance system.
However, private mortgage insurers
(MIs) were also affected.
The cornerstone of any mortgage
insurance business is the master policy,
which specifies the responsibilities of
both the insurer and the insured. In the
wake of the housing meltdown, with its
revelations that many insured loans had
been underwritten incorrectly, Fannie
Mae and Freddie Mac – the Government
Sponsored Entities (GSEs) that purchase
insured mortgages from lenders – and
their regulator and conservator the Federal Housing Finance Agency (FHFA),
called for an overhaul of the private MIs’
master policies with the goal of standardizing certain terms, including terms
The new master
policies were
written to more
clearly define the
circumstances
under which
mortgage
insurance must
be retained
related to when and for what reasons the
mortgage insurers could rescind coverage on a loan.
In late 2012, the GSEs, in conjunction
with the FHFA, provided a framework
for MIs to develop new master policies
that would cover those loans purchased
by the GSEs, with an emphasis on:
nStandardizing certain terms from
policy to policy
nIntroducing process transparency,
particularly for claims
n Enhancing clarity of coverage
n Improving operational efficiencies
The MIs were required to draft and
submit new master policies to the GSEs
and the FHFA in early 2014. After the
GSEs and FHFA approved the new master policies, the MIs submitted them to
state regulators for approval. The GSEs
targeted October 1, 2014, as the required
effective date of the new master policies.
The MIs met the challenge and debuted their new policies in October 2014.
As we move into 2015, lenders may find
that they benefit from the greater standardization. The responsibilities of all
parties to the transaction – the mortgage
originator, the servicer, and the MI – are
now clarified to a greater extent than
ever before in the industry.
New Options for Rescission Relief
Receiving particular scrutiny in the
development of the GSE framework was
the issue of rescissions.
During the recession, mortgage insurers rescinded coverage on a number
of loans they discovered to contain fraud
or to have been incorrectly underwritten by the lender when originated and
submitted for mortgage insurance. As
The Great
Recession
launched an era of
sweeping change
for the mortgage
lending industry –
change that is still
unfolding as we
move into 2015.
MI master policies varied among themselves as to the valid conditions for rescission, lenders found the language
confusing and the differing standards
relating to rescission frustrating. Rescissions rapidly became a major concern
for mortgage originators, with broader
implications for the industry as a whole.
The new master policies were written to more clearly define the circumstances under which mortgage insurance must be retained on individual
loans and when it may be rescinded.
Following the GSE requirements, they
include relief from rescissions on loans
after 36 months, or after as little as 12
months provided that the loan files were
fully reviewed by the MI company, and
so long as the borrower has made timely
loan payments.
With clearer expectations laid out
for both parties in the updated policies,
lenders can feel greater confidence in
choosing MI as their preferred means to
expand homeownership opportunities.
More options
for your members
More opportunities
for your Credit Union
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IS YOUR MORTGAGE PARTNER EXCEEDING YOUR EXPECTATIONS?
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ACUMA 2015 Annual Conference
Join us for an unforgettable
learning experience in a truly
inspiring environment
September 14-16, 2015, Bellagio, Las Vegas
Every year ACUMA strives to make our annual conference the best ever. We do it by bringing
nationally known speakers, a program tailored precisely to your needs and state of the art
conference technology together into a seamless educational experience. Throw in an outstanding
venue, sumptuous dining and time to network with the best and brightest in the CU mortgage
industry and you have a one of a kind, can’t miss experience.
You can count on ACUMA to deliver an informative program designed to
meet the needs of todays CU mortgage lending professionals. Our program
features expanded networking opportunities, special interest breakout
sessions and general sessions featuring some of the brightest stars in
the industry What will we do to make
it better in 2015? Plan to join us again
September 14-16, at The Bellagio, Las
Vegas, and find out.
Visit acuma.org for details
Loan from financial institution other than a mortgage
Sale of personal property
Life insurance
Investment property sales (1031 exchange)
Equity from refinanced investment property
Credit from lease option to buy
Loan or financial assistance through employer
Loan or financial assistance from source other than employer
Other
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2
1
2
1
1
NA
NA
8
NA
NA
NA
NA
NA
NA
NA
NA
6
NA=Not asked
* Less than 1 percent
Saving for a
Downpayment Takes
Time and Sacrifice, but
the Payoff Remains
Jessica Lautz, Director,
Survey Research and Communications, NAR
Many economists have predicted
this is the year of the return of the firsttime home buyer. Last year, data collected from the 2014 Profile of Home Buyers
and Sellers reported the lowest level of
first-time buyers since 1987—33 percent
in 2014, vs. 30 percent in 1987. The historical norm of first-time home buyers
among primary residence purchases is
40 percent. Market conditions such as
low inventory, difficulty accessing credit, competition with investors, and difficulty saving for a downpayment all are
factors for first-time home buyers.
The majority of home buyers use
savings as a downpayment source—65
percent of all buyers (81 percent of firsttime buyers, 57 percent of repeat buy-
Length of Time Buyers Take to Save for a Downpayment
Data from National Association of REALTORS® Profile of Home Buyers and Sellers 2014
Figure 1
Saving for a down payment
Length of Time Buyers Take to Save for a Downpayment
24 months to 5
years
16%
More than 5
years
13%
18 to 24 months
9%
12 to 18 months
10%
6 months or less
37%
6 to 12 months
15%
Source: National Association of REALTORS® Profile of Home Buyers and Sellers
ers). Using savings as a downpayment
source has increased in prominence over
the last 14 years as buyers are relying
less frequently on the proceeds from the
sale of their primary residence.
Saving for a home can take time for
home buyers, Figure 1, Among recent
home buyers, 37 percent saved for six
months or less, 15 percent saved for six to
12 months, and 10 percent saved for 12 to
18 months. Home buyers often make sacrifices on their path to homeownership.
72 percent cut spending on luxury or
non-essential items, 56 percent cut spending on entertainment, and 45 percent cut
spending on clothes.
There is a light at the end of the tunnel for those saving. Eighty-eight percent
of recent home buyers financed their
home purchase. The typical downpayment was 10 percent for all buyers, but
six percent for first-time home buyers
and 13 percent for repeat home buyers.
The payoff for home buyers is worth
it. Seventy-nine percent of recent buyers
believe their home is a good financial investment, and many believe it is a better
financial investment then stocks. Aside
from the financial investment, buyers
were able to successfully complete their
goal which was just to own a home of
their own.
The complete report is available at:
http://www.realtor.org/reports/highlights-from-the-2014-profile-of-homebuyers-and-sellers.
DDownpayment Sources Among Home Buyers 1997-2014
1997 20002003 20052006 20072008 20092010 20112012 20132014
Savings
NA 57%49% 50%50% 52%56% 54%66% 67%65% 64%65%
Proceeds from sale of primary residence
NA3537 4344 4334 2322 2625 3133
Gift from relative or friend
NA1312 11 9 1013 1418 1414 1414
Sale of stocks or bonds
NA NA
6
6
7
8
8
6
7
10
8
9
9
Equity from primary residence buyer continues to own
NA NA NA NA
5
5
4
2
2
3
2
2
*
401k/pension fund including a loan
NA55 54 45 57 89 89
Loan from relative or friend
NA45 54 35 46 54 44
Proceeds from sale of real estate other than primary residence
NANA
NANA3 22 12 21 22
Inheritance
NA32 32 34 34 54 44
Individual Retirement Account (IRA)
NA33 22 23 23 45 43
Loan from financial institution NA 2 6 NANA NANA NANA NANA NANA
Loan from financial institution other than a mortgage
NA NA NA
6
2
2
1
1
1
1
1
1
1
Sale of personal property
NA
2
NA NA
1
1
*
*
*
*
*
*
*
Life insurance
NA1NANA11* ** ** **
Investment property sales (1031 exchange)
NA
2
NA NA
1
1
*
*
*
*
*
*
*
Loan or financial assistance through employer
NA NA NA NA NA NA NA NA NA
*
1
2
1
Loan or financial assistance from source other than employer
NA NANA NANA NANA NANA 2 2 * *
Other
NA86 74 *5 44 443.54
NA=Not asked
* Less than 1 percent Source: National Association of REALTORS® Profile of Home Buyers and Sellers 1997-2014
ACUMA
MEMBERInsights
Benefit
Networking
at the NAR
In the pipeline:
and
observations
on CU mortgage
lending
ACUMA’s Exhibit
at the 2014 NAR
By Bob Dorsa
2014 marked the 12th anniversary for
ACUMA exhibiting at the NAR (National
Association of Realtors®). This has
become an annual event for us and our
dedicated Credit Union sponsors. Over
the years in addition to our exhibit we
have participated in breakout sessions in
4 of those years. I am often asked what I
gain from this experience and what can
we expect for the future.
The NAR is America’s largest trade
association with more than 1 million
members. Their Annual Convention and
Expo brings together the leading players
in the housing industry, including the
lenders. Since 2009 interest rates have
dropped to historic levels coinciding
with the Housing crash and Recession.
During this time the housing industry
and all its connected branches, have restructured for the future. Fortunately
ACUMA had been involved with the
NAR since 2003 and established a sound
foundation relative to Credit Unions’
emergence as a more viable alternative
to the major money center banks. We
know credit unions have been the rock
following long established safe and
sound lending practices which date back
decades. With little wavering the Credit
Union system has quadrupled its market
share in first mortgage lending over the
past decade.
The Annual NAR event is the opportunity to network with the best and
brightest in Housing Finance as we
proudly display the America’s Credit
Union’s official industry logo, as our industry’s representative for all to see. This
was a strategic decision made in the very
beginning. We determined a while ago
we needed to get back to basics and present the Credit Union system in a much
favorable light, particularly to the nation’s Realtors®.
At our ACUMA 2014 Annual Conference we were fortunate to have the
NAR’s President address our audience.
Steve Brown spoke eloquently about
the importance of community as one
The 2014 America’s Credit Union was located near the entrance
Phil Reichers, PenFed, shares the CU Message
of the pillars of our society. Having personal business experience working with
a Credit Union lender and seeing first
hand the way his clients were treated
resonated with Steve and his beliefs
about his community. He spoke of prior
relationships with lenders who had no
vested interest in the location of the
property, it was another file and maybe
little more. My reason for referring to
Steve Brown’s words is it relates directly
to our presence at the NAR Exhibit.
Along with a group of devoted participants from our Sponsoring Credit
Unions (The NAR is a weekend event
each year in November) we stood not too
far away from Wells Fargo in terms of
physical location in the hall. We capitalized on the opportunity to meet and greet
professional Realtors® and a wide array of professionals who work in and
around the housing industry. We have
thoroughly enjoyed meeting thousands
of people during our tenure. Several
years ago we developed a contest of sorts
whereby we select willing convention
goers who are both professional Realtors® and current members of a Credit
Union. We asked for a very short sound
bite responding to the question of “what
do they like about their Credit Union?”
We have several dozen great video clips
from recent years and a few incredible
testimonials to several of our ACUMA
members for the great job you do! I think
many of you would suspect if I reported
the first thing on the mind of these Credit Union member/Realtors® was sending their clients or themselves for that
matter over to their CU for their home
loan. You may not be surprised that their
top responses include, “I like they know
my name”, “it’s the least expensive car
loan I could find” to “a great way for me
to send money to my child at college (age
reference) and perhaps one of the most
recognizable features, “free checking accounts.” Once we cover the basics I have
attempted to probe further to get to what
we do every day, home loans. Many are
tuned and some even have loans with
their CU. Mostly HELOCs but a loan is
a loan!
As those who know me can guess,
I had to dig deeper. When I asked the
question referring to first mortgage loans
I would say 30% indicated they had a
positive experience or funding. The balance did not even realize their CU offered
loans (in some cases people belonged to
CUs not offering home loans) or they
share many of the old time beliefs that
the CU was ONLY available to certain
people; CU staff do NOT work weekends
(the time Realtors® sit in Open Houses) or I have a great relationship with my
Originators and no one from any Credit
Union has ever visited our office.
Several of our Exhibiting sponsors
got to meet Realtors® face-to-face for
the first time. I do actually have a few
video clips of Realtors® discussing
their loan experience with one of our
CUs on site. It was great to hear but
there were far too few.
My feeling is this provides great insight to what Credit Unions need if you
want to participate in the Realtor®
marketplace. We know sooner than later
the Refi-mania will diminish. Competition for Purchase money loans has already increased and despite changing
regulations it may be difficult getting
applications in the future.
ACUMA has been focusing on these
issues for the past few years. To some
degree our increase in market share was
due to refinance transactions, no Realtor® and a relatively simplified transaction, in real estate lending terms. Each
Credit Union needs to validate your Purchase money loan strategy. Starting with,
do you have one? We have observed
many successful internal programs and
affiliations with their party marketing
organizations. One of the key ingredients
has to be the communication with the
The America’s Credit Unions NAR Exhibit Staff
Realtor® or Broker. This will start with egy to grow each Credit Union and focus
education and meeting in their offices on the future for millennial and even
and perhaps invited them to your office. minority members is greatly improved
You should be certain to have “the right working through the housing channel. I
person” engaged in the relationship from would be remiss if I did not add the fact
the start. You must decide who the right originally offered 20 years and validated
person is but remember in your analy- many times since then. When you have a
sis to evaluate your competition and de- home loan with a borrower, that borrower
termine what they are doing since they is likely to acquire between four and eight
are likely competing for the same loans financial products from the financial inyou are? Finally I feel very comfortable stitution providing their home loan. I
encouraging you to comb through your think we will need updated strategies to
membership files. If we are able to find as meet the needs of multiple demographic
many Realtors® who are members of groups in the marketplace and if you have
a Credit Union then I believe it is key for not yet started you have a lot of catching
each credit union to know and establish up to do.
contact with your member who is a ReI hope you got something out of all of
altor®. Unfortunately I do NOT have this but in any case here are some images
the magic formula or wisdom how you of our fabulous weekend last November.
do this but with Social Media and a local If you have a comment or a question,
or community presence that should be a please do NOT hesitate to contact me at
good starting point.
[email protected] or post a comment
With recognition to all our ACUMA on our LinkedIn Group, ACUMA.
members who contributed to our NAR
Sponsorship we thank Great opportunities for networking with REALTORS® at the NAR
you. ACUMA is pleased
to facilitate this exhibit
and put the Credit Union
Brand on display. The future will indeed be challenging. A new generation of buyers with perhaps different lifestyle
priorities has already
made their voice heard
in the marketplace. I for
one still believe the strat-
Credit Union Uses eRegistry for eNotes
to Bring 21st Century Efficiency to its
Mortgage Process
A big realization
during this process
is the benefit of
data over paper—
it reduces our
ecological footprint.
There is less
wasted paper, less
toner usage and
we experienced a
reduction in courier
and shipping costs.
In addition, the
process was more
efficient. There is no
rekeying, resulting
in greater accuracy.
Once the data is
there, it never has
to be moved—it is
just there.
Technology creates much efficiency
for us every day. We shop on line, deposit a check simply by taking a photo of it
and sending it via a mobile app, pay bills
on line and even receive direct deposits
electronically. Each of these processes
simplifies our lives every day.
In the mortgage industry, an eMortgage happens when critical loan documentation – specifically the promissory
note, closing documents and security
instrument, are created electronically,
executed electronically, transferred electronically and ultimately stored electronically. MERS® eRegistry plays a
major role in this process because it is
the system of record that identifies who
is in control of the eNote and where it
is stored electronically. And, yes, this is
reality and it is done every day.
To explore how eMortgages impact
a credit union’s operations, its members
and even investors, we spoke with Steve
Wolf, System Administrator, Home
Loans Department at Boeing Employees’
Credit Union (BECU). Mr. Wolf shared
BECU’s experience using the MERS®
eRegistry for eNotes. To provide some
perspective on its mortgage operation,
BECU originates more than $1 billion in
mortgage loans per year and has more
than 850,000 members.
Q:
How did eNotes come to your attention? What made you inclined to learn
more?
A:
In 2006, a goal at BECU was to eliminate paper from the beginning to the
end of the mortgage loan process and
I was asked to explore eNotes. At that
time, the credit union had a paperless application process, but we still used folders for files, generated paper docs and
sent document images that were printed
on paper at closing. The vision was paperless from the application process to
signing and funding the loan. We were
successful in our vision and the first eSigning occurred in October of 2007.
A big realization during this process
is the benefit of data over paper—it reduces our ecological footprint. There is
less wasted paper, less toner usage and
we experienced a reduction in courier
and shipping costs; as well as a reduction in our couriers’ carbon foot prints—
this is big. In addition, the process was
more efficient. There is no rekeying, resulting in greater accuracy. Once the data
is there, it never has to be moved—it is
just there. Paper can get lost or misfiled;
eNotes provide for accurate data all the
way through the process. While there
have been hiccups with eNotes, we’ve always been able to track them down and
they contribute to better transparency
and compliance tracking. It is a beautiful thing and it is now a true paperless
process from beginning to end.
Q:
A:
How did employees like the new process?
There were early adopters who
embraced the change. Others focused
on how it had always been done and it
was a challenge for some employees. Ultimately, they came around.
Q:
We discussed the credit union’s experience, what has the member experience been with eClosings?
A:
The member experience helped
drive the process from the beginning.
The electronic process is much simpler because it really only includes two
signatures—a paper closing can be
overwhelming and require signing between 25 and 40 documents. Members
benefit because of the speed of which
closings can happen. Further, eNotes
have made it easier for us to meet the
Consumer Finance Protection Bureau‘s
(CFPB) “Know Before You Owe” (KBYO)
requirement that takes effect on August
1, 2015. This is a new requirement that
borrowers have the opportunity to review their documents three days before
a signing. eNotes put BECU ahead of
the curve because this requirement is
already met.
Q:
A:
I have heard you use the term “Coffee Shop Signing.” What does this mean?
Members like eNotes because a
closing can occur in the comfort of their
own home—or even at a coffee shop. A
real benefit is that they are able to review documents before the signing. A
closing can happen anywhere and documents can be signed on a tablet. In the
beginning, we incented members with a
gift card to use eClosings, but that is no
longer necessary. Members gravitate toward the eSignings on their own. eNotes
provide efficiency, a quicker closing and
there is no paper—it’s very cutting-edge.
Q:
A:
Do members have to use eNotes
when refinancing or purchasing a home?
We give our members the option of
an eNote process or the traditional paper
based approach when they refinance or
originate a home loan and the response
has been favorable. In fact, 65 percent of
our mortgage lending is refinances and
of those refinances about 50 percent are
eClosings. The reason the emphasis is
primarily on refinances is because the
credit union does not direct the eSigning closing process on purchases, as it
does with an eSigning closing on refinances. In most cases, realtors direct the
selection of a closing agent on purchase
transactions and many escrow companies may not have the eSigning pad,
tools and the training needed for eSignings, so it cannot be done. This is sometimes a challenge. However, if all the parties have the right tools, eClosings can be
used for home purchases.
Q:
A:
What has the investor response
been?
BECU primarily sells to Fannie Mae
if it does not hold the loan in portfolio.
Fannie Mae has been enthusiastic and
helps drive the process. eNotes allow
investors to receive loans faster, they
can review them electronically and the
credit union receives its funds faster
because there is no shipping involved.
Other investors beyond just Fannie Mae
are beginning to see the benefits of the
eNote process.
Q:
What is different about servicing
eNotes? Are there challenges?
UPCOMING
A:
We have not experienced any challenges servicing eNotes—including
with foreclosures or charge offs. They
have been handled the same and have
gone well during the past seven years
since the inception of eNotes.
Q:
When starting the eNote process,
would you recommend using a trusted
vendor or creating your own internal systems to manage the process?
A:
We rely on our vendor partners
for the technology expertise. I cannot
imagine creating this process from start
to finish—just the technology required
alone is intense. And, there are good
solutions out there—take advantage
of what’s available. I definitely recommend using a vendor to help establish
the eNote process.
Q:
A:
In closing, is there anything you
would like to add?
We love our eSigning process. This
is how we became involved with MERSCORP Holdings, Inc. and the MERS®
eRegistry, and it has been a successful
relationship.
2015
EVENTS
You can count on ACUMA to
provide an innovative program,
unmatched networking and an outstanding venue.
Save the dates to join us in 2015!
ACUMA WORKSHOP
ACUMA WORKSHOP
Hilton Union Square Hotel
San Francisco, CA
May 20-21 2015.
Westin Copley Plaza
Boston, MA
June 30-July 1, 2015
2015 Annual
Conference
Bellagio Las Vegas
September 14-16, 2015
Visit acuma.org for more information
WIDEN YOUR
OPPORTUNITIES
LET PERFORMANCE PREMIUM GIVE
YOU TAP-INS, NOT SAND TRAPS.
®
With a wider range of qualifying loan and property types, like second homes, you not only get
happy members, you get the opportunity to close more loans. That’s a gimme for everyone.
TO LEARN MORE, VISIT UGCORP.COM OR CALL 877.642.4642.
© United Guaranty Corporation 2014. All rights reserved. United Guaranty is a marketing term for United Guaranty Residential Insurance Company and United Guaranty Mortgage Indemnity Company. 230 N. Elm St., Greensboro, NC 27401.
Coverage is available through admitted company only. "United Guaranty" and “Performance Premiuim” are registered trademarks.
ACUMA Sets new record for
2014 Annual Conference Attendance…
By Bob Dorsa
Last September, ACUMA reached a
new milestone, bringing together nearly
400 mortgage banking professionals at
our 18th Annual Conference. We have
learned quite a lot in almost two decades. We take great pride that the public awareness of Credit Union mortgage
lending is much higher than when we
started in 1996.
One of the initial goals for ACUMA
was to “increase the awareness” of Credit Union mortgage lending. We have
watched our market share more than
quadruple from a lack luster of 2% in
the mid-90s to in excess of 8% today.
I believe this achievement is nothing
short of amazing and I would be the first
one to say it is the resiliency and dedication of a core group of progressive credit
unions that has made it possible. CUs believing in the value this important product provides to the overall growth and financial stability of the credit union overall. ACUMA has grown to more than 260
of the nation’s leading mortgage lending
CUs. We are still adding members as
more and more credit unions figure out
that without mortgage lending and all
the related benefits, the future for their
organization is bleak.
What does this have to do with
last year’s record setting attendance?
Yes, Las Vegas is an exciting venue for
Steve Farber - Discussing Leadership.
General Ballroom with more than 350 participants and 22 Exhibiting Sponsors.
an event. That said, I recall a comment
made to me during our the conference
by a speaker from outside our immediate CU mortgage lending family. He was
quite impressed that the majority of our
conference participants attend and engage in the various breakout sessions.
A testament to the high value of our
educational sessions and Networking
Receptions, as well as the dedication of
our attendees.
So how was this year’s event different? When planning our 2014 Annual
Conference we considered our agenda
first. We looked at the critical topics
and it was apparent that there were
many, too many, and we only had 2 and
½ days. At that point we made a decision to add additional workshops prior
to the formal start of
our event, as many
people like to arrive
and enjoy Las Vegas
prior to our event.
We thought that some
might be interested
in getting right into it
Monday morning, before our official noon
conference start. We
were amazed, of the
nearly 400 partici-
pants, more than 250 were in the hotel
Sunday. This was great and that group
got the additional pre-conference workshops first thing Monday. These sessions
were all great. One discussion session,
Know-Before-You-Owe, comes to mind;
also covered were Loan Servicing, and
a growing focus on dealing with Millennials and borrowers with very different
demographic characteristics than CUs
are accustomed to. These sessions were
strictly voluntary and just about all of
the seats were full.
Next we headed to the formal program. Our first Keynote Speaker was
Steve Farber. His message on Leadership was in step with our overall focus
and was delivered with the right blend
of enthusiasm and thought-provoking
nuggets to get the audience stimulated.
We then moved to our Day 1 Breakout
sessions, Compliance, Working Through
Complex Regulations with Kris Kully
and The Future of Government Lending
with Tim Rood. Once again full seating
at both sessions.
After a brief break was the first of
our two Receptions featuring our Conference Exhibitors. Their displays lined
the perimeter of the beautiful Encore
Ballroom. It is great to see hundreds of
professional mortgage banking people
Erik Wahl, Unbelievable.
chatting each other up on the single
focus of residential housing issues. I’m
not really sure there is anything like it
anywhere! After the networking many
of our devoted sponsoring participants
provided additional social activities for
the evening. Fortunately, one commodity Las Vegas has in spades is hospitality in the form of restaurants, shows and
fun things to do, other than gaming.
Day 2 began early with a great Breakfast Buffet for 300. Obviously there are
still a few folks who need more sleep
and/or a quick workout prior to beginning their day’s activities. We began the
program with the nationally renowned
Economist Dr. Mark Zandi. ACUMA
first met Dr. Zandi a decade ago and his
rise to national acclaim endears him to
our cause. We often see Dr. Zandi on
CNBC or CNN. He has shared his annual
economic forecast with Pipeline readers
each year since 2009. (See page 30 for his
report on 2015) As always Zandi’s forecast was spot on and he possess both elegance and charisma in his connection
with ACUMA members. Following Dr.
Zandi was a speaker best described as
“truly talented and amazing.” Erik Wahl
is a former corporate executive
who turned in his fountain
pen for a paint brush. While
delivering a very inspirational
message Erik painted not one,
but TWO, incredible pieces
of art. He began with a tease
and illustration describing
how people are generally cautious about taking risks. The
unexpected result of Erik’s
time with ACUMA was that
in addition to his message, we
retained two beautiful pieces
of original art. After the session we held a silent auction
of one of Erik’s paintings.
The winning bid was $2,000
with the proceeds going to the
NAR’s Realtors Relief Foundation. Knowing how difficult it
would be for anyone to follow
Erik Wahl we then broke for
another fantastic Buffet Lunch
provided by the Encore.
Day 2 afternoon was devoted to six breakout sessions.
The topics featured panel
discussions addressing; Growing (creating) ARM Loan products; Best Practices
in Loan Participations and Loan Underwriting. Other breakout session topics
covered, Construction Lending; Partnering and Working with REALTORS®; and
a review of Reverse Mortgage Lending
markets today. After several hours of intense education it was time for our Day
2 afternoon Wine & Cheese Reception.
Stage filled with President’s
Dr. Mark Zandi.
Of all of the time our participants spend
at our events the Networking Receptions
generally rank among the most popular.
Participants enjoyed the same dynamic
atmosphere as the Day 1 reception.
Again the evening was filled with more
dinners and Vegas night-life enjoyment,
which seems to be much more fun with
friends and business partners.
All of that bring us to the finale, Day
3. We were fortunate to have as our Opening Speaker, Carrie Hunt, General Counsel and Sr. VP from NAFCU. It has been
a longstanding goal of ACUMA to engage
with our larger trade associations, particularly those focused on the legislative front.
Carrie is well versed on all of the mortgage lending related issues and delivered
an astute update of what is and should be
happening in the coming months.
Following Carrie, was the President
of the National Association of REAL-
Steve Brown - President of the NAR.
of Qualified Mortgages and prospects
for the creation of
a secondary market for selling NonQualified Mortgages. Speaking was
Mitch Hochberg,
a former attorney
with CFPB. Mitch,
along with his
new firm, Fenway
Summer, is very
involved in addressing the prospects of
making this a part
of the mortgage banking industry and
alleviating some issues already frustrating some Credit Union lenders who are
caught in the Non-QM world for loan applications from longtime CU members.
After another sumptuous Buffet lunch
it was off to the final two sessions in the
afternoon. We began with a very interesting session presented by Karen Deis,
a mortgage industry veteran who took the
opportunity to review her best practices
as it pertains to achieving success in mortgage banking. Of particular interest were
several examples of documents she still
uses today with borrowers.
Our final session on Loan Origination
featured two successful Loan Originator
Sales Managers. Nanette Graviet and
James Smith formed our panel with the
incomparable Tracy Ashfield acting as
moderator. Unfortunately, gone are the
days of answering the phone and accepting applications from members or check-
TORS® (NAR), Steve Brown. Steve’s
Real Estate Brokerage firm has a relationship with a CUSO in Ohio. Steve
has observed firsthand the difference
between the “credit union” approach to
loan origination and servicing versus the
banking segment which has dominated
for decades.
I was enthused by Steve’s views on
the similarities between Realtors®
and Credit Unions. Both offer the very
best service to their respective clients
and a great deal of emphasis is placed on
the community. I see this as a powerful
message and perhaps a sign of how relationships in the housing marketplace
are changing. Borrowers and consumers want to deal with lenders who care
about the borrower’s needs. Brown emphasized the importance of strengthening this important benefit for borrowers
as the competition for loans gets even
tighter. Younger borrowers want to be
engaged and involved in
the transaction and success
will be reserved for lenders
subscribing to this value. It
was also a great privilege to
present Steve a check for
$2,000, the proceeds of our
day 1 auction, made to the
Realtors® Relief Foundation, which will help Realtors® in need. We retained one piece of art that
we will auction in 2015 for
another contribution to the
foundation.
The final session of the
morning was on the topic Networking Lunch begins with the Buffet LIne.
ing with the online
origination systems
to see what’s new!
In today’s world
loan applicants are
relatively hard to
identify and frequently the originator is immersed in
intense competition
for the loan. The
panelists were qualified Originators and
Managers and their
Credit Unions rank
high on the charts
of Loan Originator
production. Great
information
and
even in the late af- Tracy Ashfield - Co-Host of ACUMA’s
ternoon on Day 3 Annual Conference.
still several hundred
people in attendance. As ACUMA’s President this is the best evidence I can see to
validate the quality and appreciation of
all of the hard work we put in to hosting
this event.
As an added benefit, all of ACUMA’s
members receive Podcast Digital Recordings of each and every session. There was
a huge amount of material presented. It
would be an injustice to return to the
Credit Union with just slide presentations. Having the digital recordings simplifies sharing and networking within
each of our member Credit Union’s organizations, making it that much easier
to spread the word. This is just another
example of our continuing commitment
to provide as much value as
possible to both those in attendance and to those back
in the office.
Our 2015 Fall Annual
Conference will be held at
the Bellagio Resort and Hotel in Las Vegas beginning
on September 14 and concluding on September 16,
2015. If you are NOT currently a member and want
information to join with
us, please do NOT hesitate
to contact me at bdorsa@
acuma.org.
‘
THANK YOU
We want to thank our over 300 members
for the commitment they make to being
Member’s top choice for real estate loans.
1st Mid America Credit Union, Bethalto, IL
1st United Services Credit Union, Pleasanton, CA
A+ Federal Credit Union, Austin, TX
ABNB Federal Credit Union, Chesapeake, VA
Advantiis Credit Union, Milwaukee, OR
Advia Credit Union, Janesville, WI
Aerospace Federal Credit Union, El Segundo, CA
Affinity Plus Federal Credit Union, St. Paul, MN
Air Academy Federal Credit Union, Colorado Springs, CO
Air Force Federal Credit Union, San Antonio, TX
Alaska USA Federal Credit Union, Anchorage, AK
Align Credit Union, Lowell, MA
Allegiance Credit Union, Oklahoma City, OK
Alliance Credit Union, San Jose, CA
Alliant Credit Union, Chicago, IL
AllSouth Federal Credit Union, Columbia, SC
Altra Federal Credit Union, LaCrosse, WI
AmerChoice Federal Credit Union, Mechanicsburg, PA
America’s First Federal Credit Union, Birmingham, AL
American Airlines Emp. FCU, Fort Worth, TX
Andrews Federal Credit Union, Suitland, MD
Anheuser-Busch Employees’ CU, St. Louis, MO
Arch Mortgage Insurance Company, Walnut Creek, CA
Arizona State Credit Union, Phoenix, AZ
Arkansas Federal Credit Union, Jacksonville, AR
Atlantic Regional Federal Credit Union, Brunswick, ME
Baxter Credit Union, Vernon Hills, IL
Bay Ridge FCU, Brooklyn, NY
Bayport Credit Union, Newport News, VA
BECU, Tukwila, WA
Bellco Credit Union, Greenwood Village, CO
Bethpage FCU, Bethpage, NY
Bourns Employees FCU, Riverside, CA
California Credit Union, Glendale, CA
Campus USA Credit Union, Gainesville, FL
Casco FCU, Gorham, ME
CBC Federal Credit Union, Oxnard, CA
CEFCU, Peoria, IL
Centris Federal Credit Union, Omaha, NE
CFE Federal Credit Union, Lake Mary, FL
Chevron Credit Union, Oakland, CA
Citadel Federal Credit Union, Exton, PA
Citizens First Credit Union, Oshkosh, WI
Coastal Federal Credit Union, Raleigh, NC
CoastHills Federal Credit Union, Lompoc, CA
Colorado Credit Union, Littleton, CO
Commonwealth Credit Union, Frankfort, KY
Community CU of Florida, Rockledge, FL
Community Financial, Plymouth, MI
Community First Credit Union, Appleton, WI
Community First CU of FL, Jacksonville, FL
Community Mortgage Funding, LLC, Pomona, CA
Community Resource Credit Union, Baytown, TX
CommunityAmerica Credit Union, Lenexa, KS
Congressional FCU, Oakton, VA
Consumers Credit Union, Mundelein, IL
Consumers Credit Union (MI), Oshyemo, MI
Coors Credit Union, Golden, CO
CoVantage Credit Union, Antigo, WI
Credit Union Oak Lawn, IL
Credit Union Mortgage Association, Fairfax, VA
Credit Union of America, Wichita, KS
Credit Union of Colorado, Denver, CO
Credit Union of Southern California, Brea, CA
CU Companies, New Brighton, MN
CU Home Mortgage Solutions, Seattle, WA
CU Mortgage Direct. LLC., Sioux Falls, SD
CUC Mortgage, Albany, NY
CUMAnet, LLC, Basking Ridge, NJ
CUSO Mortgage (CA), Anaheim, CA
CUSO Mortgage Corp., Hampden, ME
Cyprus Federal Credit Union, West Jordan, UT
DATCU, Denton, TX
Delta Community Credit Union, Atlanta, GA
Denali Alaskan FCU, Anchorage, AK
Desco Federal Credit Union, Ashland, LA
Desert Schools FCU, Phoenix, AZ
DFCU Financial, Dearborn, MI
Digital Federal Credit Union, Marlboro, MA
Dupaco Community Credit Union, Dubuque, IA
DuPage Credit Union, Naperville, IL
Dupont Community Credit Union, Waynesboro, VA
Eastman Credit Union, Kingsport, TN
Educational Systems FCU, Greenbelt, MD
Educators Credit Union, Racine, WI
EECU, Fort Worth, TX
Elevations Credit Union, Boulder, CO
Eli Lily FCU, Indianapolis, IN
Empower Federal Credit Union, Syracuse, NY
Ent Federal Credit Union, Colorado Springs, CO
Envision Credit Union, Tallahassee, FL
FAA Credit Union, Oklahoma City, OK
Fairwinds Credit Union, Orlando, FL
Fibre Credit Union, Longview, WA
Financial Partners Credit Union, Downey, CA
First Entertainment Credit Union, Hollywood, CA
First Heritage Financial, LLC, Phildelphia, PA
First Light Federal Credit Union, El Paso, TX
First New England FCU, East Hartford, CT
First Tech Credit Union, Beaverton, OR
Five County Credit Union, Bath., ME
Five Star Credit Union, Dothan, AL
Foothill Federal Credit Union, Arcadia, CA
FORUM Credit Union, Fishers, IN
Fox Communities Credit Union, Appleton, WI
Ft. Knox Federal Credit Union, Radcliff, KY
Georgia United CU, Duluth, GA
Gesa Credit Union, Richland, WA
Golden 1 Credit Union, Sacramento, CA
Great Lakes Credit Union, Naperville, IL
Great River Federal Credit Union, St. Cloud, MN
Grow Financial FCU, Tampa, FL
GTE Financial, Tampa, FL
Guardian Credit Union, Montgomery, AL
Hapo Community Credit Union, Richland, WA
Harborstone Credit Union, Tacoma, WA
Heartland Credit Union , Springfield, IL
Heartland Credit Union , Madison, WI
Hiway Federal Credit Union, St. Paul, MN
Honda Federal Credit Union, Marysville, OH
Horizon Credit Union CUSO, LLC, Spokane Valley, WA
Hudson Valley FCU, Poughkeepsie, NY
IC Federal Credit Union, Fitchnurg, MA
Idaho Central Credit Union, Chubbuck, ID
Ideal Credit Union, Woodbury, MN
Jeanne D’Arc Credit Union, Lowell, MA
Justice Federal Credit Union, Chantilly, VA
Keesler Federal Credit Union, Biloxi, MS
Kern Schools FCU, Bakersfield, CA
Kinecta Federal Credit Union, Manhattan Beach, CA
Knoxville TVA Employees CU, Knoxville, TN
Lafayette Federal Credit Union, West Kensington, MD
Lake Michigan Credit Union, Grand Rapids, MI
Landmark Credit Union, New Berlin, WI
Langley Federal Credit Union, Newport News, VA
Leominster Credit Union, Leominster, MA
Local Government Federal Credit Union, Raleigh, NC
Lockheed GA Empls FCU, Marietta, GA
Los Angeles Firemen’s Credit Union, Los Angeles, CA
Los Angeles Police Federal Credit Union, Van Nuys, CA
Maine Savings FCU, Hampden, ME
MECU, Schaumburg, IL
Member First Mortgage, LLC, Grand Rapids, MI
Members Choice Credit Union, Houston, TX
Members Mortgage Services, Hutchinson, KS
Merck Sharp & Dohme Federal CU, Chalfont, PA
Meritrust Credit Union, Wichita, KS
Meriwest Mortgage Company, San Jose, CA
Merrimack Valley Federal CU, Lawrence, MA
Metro 1st Mortgage, Omaha, NE
Metropolitan Credit Union, Chelsea, MA
Michigan Community Credit Union, Jackson, MI
Michigan Schools & Government CU, Clinton Township, MI
Mill City Credit Union, Minnetonka, MN
Missoula Federal Credit Union, Missoula, MT
Mortgage Lending Services, LLC, Plymouth, MN
Mountain America Credit Union, West Jordan, UT
Municipal Credit Union, New York, NY
myCUmortgage, Beavercreek, OH
NASA Federal Credit Union, Upper Marlboro, MD
Navy Federal Credit Union, Merrifield, VA
Neighboorhood Mortgage Solutions, Frankenmuth, MI
Neighbors Credit Union, Saint Peters, MO
NorthCountry FCU, Burlington, VT
Northern Federal Credit Union, Watertown, NY
Northwest Federal Credit Union, Herndon, VA
Numerica Credit Union, Spokane, WA
Ocean Communities FCU, Biddeford, ME
Oklahoma Central Credit Union, Tulsa, OK
Orange County’s Credit Union, Santa Ana, CA
Oregon State Credit Union, Corvallis, OR
ORNL Federal Credit Union, Oak Ridge, TN
Pacific Credit Union, Fullerton, CA
Accenutre Mortgage Cadence, Denver., CO
Advantage Credit, Inc., Evergreen, CO
American Reporting Company, Lynwood, WA
AmeriCU Mortgage Company, Troy, MI
Black Knight Financial Services, Inc., Jacksonville, FL
BOK Financial Correspondent Mortgage Serv, Tulsa, OK
Cartus Corporation, Irving, TX
CORELogic, San Francisco, CA
Credit Plus, Inc, Salisbury, MD
CU Appraisal Services, Fairborn, OH
CU Members Mortgage, Dallas, TX
CU Partners, Santa Ana, CA
CU Realty Services, Castaic, CA
CUNA Mutual Group, Milwaukee, WI
D+H, Mequon, WI
DGU Insurance Associates, Inc., Greensboro, NC
Dovenmuehle Mortgage, Inc., Lake Zurich, IL
Equifax Mortgage Solutions, Scottsdale, AZ
Essent Guaranty, Inc., Radnor, PA
Park View Federal Credit Union, Harrisonburg, VA
Partners Federal Credit Union, Lake Buena Vista, FL
Patelco Credit Union, Citrus Heights, CA
Pen Air Federal Credit Union, Pensacola, FL
Pentagon Federal Credit Union, Alexandria, VA
Philadelphia Federal Credit Union, Philadelphia, PA
Piedmont Advantage Credit Union, Winston-Salem, NC
Pima Federal Credit Union, Tucson, AZ
Police & Fire Federal Credit Union, Philadelphia, PA
Polish & Slavic FCU, Brooklyn, NY
Premier America Credit Union, Chatsworth, CA
Premier Source Credit Union, E. Longmeadow, MA
Professional FCU, Ft. Wayne, IN
ProMedica FCU, Toledo, OH
Purdue Employees Federal Credit Union, Lafayette, IN
Qualstar Credit Union, Redmond, WA
Randolph-Brooks FCU, Universal City, TX
Red Canoe Credit Union, Longview, WA
Red Crown Credit Union, Tulsa., OK
Redstone Federal Credit Union, Huntsville, AL
Redwood Credit Union, Santa Rosa, CA
River Region Credit Union, Jefferson City, MO
Robins Federal Credit Union, Warner Robins, GA
Rogue Federal Credit Union, Medford, OR
Royal Credit Union, Eau Claire, WI
San Antonio Credit Union, San Antonio, TX
San Diego County Credit Union, San Diego, CA
Schools First FCU, Santa Ana, CA
Scott Credit Union, Edwardsville, IL
Seasons Federal Credit Union, Middletown, CT
Seattle Metropolitan CU, Seattle, WA
SECU, Lintchicum, MD
Security Service Federal Credit Union, San Antonio, TX
Service Credit Union, Portsmouth, NH
Sharonview FCU, Ft. Mill, SC
Shell FCU, Deer Park, TX
Silver State Schools Mortgage Co., Las Vegas, NV
SIU Credit Union, Carbondale, IL
Smart Financial Credit Union, Houston, TX
South Carolina Federal Credit Union, N. Charleston, SC
Southwest Airlines FCU, Dallas, TX
Spirit of Alaska FCU, Fairbanks, AK
Spokane Teachers Credit Union, Spokane, WA
Affiliated Organizations
Fannie Mae, Washington, DC
Federal Home Loan Bank of Chicago, Chicago, IL
FICS, Addison, TX
First American, Santa Ana, CA
Freddie Mac, McLean, VA
Genworth Financial, Raliegh, NC
Guild Mortgage, San Diego, CA
Intuvo, Santa Cruz, CA
Investors Title Company, Glendale, CA
Kroll Factual Data, Loveland, CO
Law Offices of Morton W. Baird, II P.C., San Antonio, TX
LenderLive Network, Inc., Glendale, CO
LendingQB, Costa Mesa, CA
MERSCorp, Holdings, Inc., Reston, VA
MGIC, Milwaukee, WI
MIAC Analytics, New York, NY
Midwest Loan Services, Inc., Madison, WI
Mortgage Harmony Corp., McLean, VA
St. Helens Community Credit Union, St. Helens, OR
Stanford Federal Credit Union, Palo Alto, CA
Summit Credit Union, Madison, WI
Suncoast Credit Union, Tampa, FL
Sunmark Federal Credit Union, Latham, NY
Teachers Credit Union, South Bend, IN
Technology Credit Union, San Jose, CA
Tennessee Valley Federal Credit Union, Chattanooga, TN
Texas Dow Employees Credit Union, Lake Jackson, TX
Three Rivers FCU, Ft. Wayne, IN
Tinker Credit Union, Tinker AFB, OK
Tower Federal Credit Union, Laurel, MD
Town and Country Credit Union, Minot, ND
Travis Credit Union, Vacaville, CA
Tropical Financial Credit Union, Miramar, FL
Tru Home Solutions, Lenexa, KS
TruChoice FCU, Portland, ME
Truity Federal Credit Union, Bartlesville, OK
Truliant Federal Credit Union, Winston-Salem, NC
Tulsa Federal Credit Union, Tulsa, OK
Twin Star Credit Union, Lacey, WA
Uncle Credit Union, Livermore, CA
United Heritage Credit Union, Austin, TX
United Nations Federal Credit Union, Long Island City, NY
Unitus Community Credit Union, Portland, OR
University FCU RE Services, Austin, TX
University Federal Credit Union, Austin, TX
University of Iowa Community CU, Iowa City, IA
University of VA Community CU, Charlottsville, VA
URW Community FCU, Danville, VA
USC Credit Union, Los Angeles, CA
USF Federal Credit Union, Tampa, FL
UW Credit Union, Madison, WI
Vantage West Credit Union, Tucson, AZ
Veridian Credit Union, Waterloo, IA
Virginia Credit Union, Inc., Richmond, VA
Vystar Credit Union, Jacksonville, FL
Washington State ECU, Olympia, WA
Weokie Credit Union, Oklahoma City, OK
Westconsin Credit Union, Menomonie, WI
Westerra Credit Union, Denver, CO
Whatcom Educational Credit Union, Bellingham, WA
Wright-Patt Credit Union, Beavercreek, OH
Xceed Federal Credit Union, El Segundo, CA
MortgageFlex Systems, Inc., Jacksonville, FL
National Closing Solutions, Roseville, CA
National Mortgage Insurance Co., Emeryville, CA
Optimalblue, Plano, TX
PHH Mortgage, Mt. Laurel, NJ
Prime Alliance Servicing by Cenlar, Ewing, NJ
Quicken Loans Mortgage Services, Charlotte, NC
Radian Guaranty Inc., Philadelphia, PA
Secondary Marketing Resources, Wellesley, MA
SWBC, San Antonio, TX
The Property Sciences Group, Pleasant Hill, CA
The Quality Control Center, West Palm Beach, FL
The Stone Hill Group, Atlanta, GA
United Guaranty/AIG, Greensboro, NC
Urban Lending Solutions, Inc., Broomfield, CO
Value Check, Highlands Ranch, CO
vanWagenen Financial Services, Eden Prairie, MN
Veros, Santa Ana, CA
ACUMA
MEMBERInsights
Benefit
Discounted/Priority
Registration
In the pipeline:
and
observations
on CU mortgage lending
2015 ACUMA Real Estate Lending Workshops
Why Should
You Attend?
The mortgage lending world is
continuing to evolve. And the pace is
quickening. To stay on top of developments requires tons of information to
be processed from diverse areas.
Attending one of ACUMA’s Real Estate Lending
Workshops will arm you with the latest information on all relevant fronts—purchase money strategies, regulatory/compliance changes, and operational best practices.
We’ll bring you face-to-face with top industry
experts for panel discussions and featured speakers
sharing in-depth information on the topics that are
important to you.
You’ll have a chance to ask questions and get the
best advice for your credit union or CUSO, helping
you offer new and existing members the best mortgage options in your own market.
Can you afford not to attend one of these
ACUMA workshop in 2015? We’ll bring together
the important topics and experts—providing a
high value education in just two days. Make plans
now to participate and apply the knowledge gained
to your own operation.
May 20-21
Hilton San Francisco Union Square
San Francisco, CA
June 30 – July 1
The Westin Copley Place
Boston, MA
Program Highlights
This year’s workshops bring together some of the
best credit union leaders and industry experts for focused discussions on the real estate lending topics you
want to know more about.
Going Beyond the Regulations
Amanda Phillips, Accenture
This program goes well beyond the regulations. We
will explore the operational and business model impact
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Feature Article
Millennials:
Challenge and Opportunity
by Ann Clurman and Rob Callender
Millennials: Challenge and Opportunity
78% of
Millennials agree:
“These days, you
don’t need to own
a home to have a
good life.”
You only have to read the
Source:
The Futures Company
headlines to know that
the worst economic downturn in more than seven decades disproportionately
affected Millennials. The effects are oft-repeated and a bit ominous: This is
a group of late starters and inexperienced entry-level employees hamstrung
by a dearth of jobs during the downturn. As signs point to renewed economic
vigor in the broader economy, these individuals remain far more likely to be
unemployed, underemployed and loaded with debt than any other generation.
Many Millenials are “starting slowly and earning less, often taking jobs for low pay
or accepting unpaid internships just to get a foot in the door.
One-third are living with parents or are financially dependent on them.
(Source: usatoday.com, 3.14)
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B
Still, all the pundit doomsaying so
usinesses everywhere are strugprevalent in discussions about this genergling to understand what role Milation misses an important reality: Generalennials play in their mid- to longtions typically build on their predecessors’
term strategies. It’s a particularly
discoveries and advances. In particular,
vexing question for bankers, given
Millennials tended to be shrewder, more
that Millennials, at present, aren’t “easy
confident consumers than Gen Xers of
money” for the financial services sector.
the same age. And the younger cohort’s
As we’ll discuss within this report, Millenmarket savvy seems to have extended
nials remain financially constrained and
beyond simple purchase transactions.
not a little wary of the financial system’s
While it’s popular to bemoan Millennials
machinations. They tend to be less interas a drifting, listless, instant-gratification
ested in old-line banking standbys such
generation, a study by the St. Louis Fed
as brick-and-mortar branches staffed by
pokes some holes in that stereotype. (For
tellers, often preferring mobile solutions
those unwilling to wade through 26 pages
that many organizations are only now beof Fed-speak, The Atlantic has a shorter,
ginning to prioritize. These problems are
more accessible distillation.
widespread, but they’re particularly acute
In brief, although the study shows that
for credit unions.
Millennials are less likely than their older
Although credit unions could (and
peers to own assets such as homes and
should) benefit from the recognition that
stocks, we view this finding as a natural
Source:
they’re not like traditional banks, most
and expected function of their lifestage
Millennials aren’t aware of these distinc(young adults) and not their cohort (MilThe Futures Company
tions. Even more problematically, many
lennials). In fact, comparing young adults
don’t have more than a tangential underin 2013 against those in 1989, the study
standing of what it means to belong to a credit union. That’s finds that significantly more Millennial young adults own their
a problem, but perhaps not an insurmountable one. As we’ll own home or an investment account—such as a 401(k) or an
discuss extensively in this article, Millennials are open—even IRA—than did their Boomer/Xer forebears. Likewise, although
eager—to reinvent the status quo. If credit unions can posi- young-adult stock ownership was much lower in 2013 than in
tion themselves as the natural alternative to a suspect system, 2001, 2013 levels were nonetheless higher than in 1989.
they can seize the mantle of disruptive innovator rather than
And while net worth (in 2013 dollars) declined from 1989
also-ran.
to 2013, levels of credit-card and automobile debt declined, as
well. We see this as an encouraging sign that Millennials are
responding rationally to their present reality and positioning
themselves for the future.
Millennials’ attitudes have shifted broadly as they respond
The finding that young-adult homeownership is higher than
to a reality that’s substantially at odds with the one they were in 1989 feels especially counterintuitive given all the handraised to expect. For example, while homeownership is still an wringing over Millennial ownership rates. And it’s true that
aspiration for many Millennials, it is by no means the perva- many Millennials are single and childless, so owning a home
sive and collective dream characteristic of previous genera- (while perhaps vaguely aspirational in some way) is not meantions. Lack of funds (as we will see later) is only one player ingful to them as a place to raise a family. More young people
shaping this mindset. Lifestyle preferences, personal lifestage than ever before feel they can live without home ownership:
timetables, new notions of success and more, all play a role in They just don’t need it right now, and as they learn to live withmaking home ownership less relevant at this time in their lives. out a home, it’s possible many will never come to see it as a
61% of
Millennials say
“it’s your
responsibility to
stand up for beliefs
even if they are
unpopular.”
Revision and Reinvention
“Compared with young adults in 1989, young adults in 2013 were more likely to own
homes, stocks, and retirement accounts. Moreover, young adults in 2013 were less
likely to have high debt payment burdens than older adults, young adults in 1989,
and young adults in 2001,” the study found. And the median value of bank accounts,
retirement portfolios, and stocks held by young Americans were equal or higher than
the value of the same holdings for young Americans in 1989.” (The Atlantic)
must-have priority.
However,
barring continued or
increased job insecurity or financial
instability, we expect
many
Millennials
to take more concrete steps toward
homeownership in
coming years. In fact,
80 percent of Millennial homeowners
also feel that owning
a home is one of their
proudest accomplishments. (Source: The
Futures Company)
Like it or not, Millennials are the future. It’s up to you to
begin to understand
this cohort – and to
Source:
make your best case
to them. Insights
The Futures Company
and timely perspectives on a generation’
thinking can help ensure that businesses are not operating
under a set of incomplete or outdated assumptions as they
67% of
Millennials agree
“nowadays we
are free to shape
our own identities
and transform
ourselves in any
way we want.”
cultivate consumers in their marketing communications and
product and service offerings. Generation matters.
Generation Matters
A generation is a group of people who grew up and came
of age together, linked through the shared life experiences of
their formative years. Economic conditions, pop culture, world
events, politics, technology, heroes and villains, are all examples
of collective experiences that set the tone for a generation, give
it direction, provide it with a sense of what’s possible, what’s
valuable and what life skills are needed. While there will be a
diversity of opinions in any group, a generational cohort will
show a distinctive mix of core attitudes and values that affect everything from saving and spending orientation to career choice
and work style to media and communication behaviors, etc.
Businesses whose core constituency is defined at least in
part by lifestage or living situation must recognize and respond
to “generational change-overs”; age alone does not provide
insights as to how consumers choose to fulfill the needs and
necessities of lifestage. Generation does. Most Matures lived
at home until marriage. Boomers added a stop along the way
between childhood home and married home, flocking to apartment living and roommates (not to mention orange crates-asbookcases!). Today, Millennials continue to upend traditional
lifestage-based assumptions about rites of passage and all sorts
of ownership aspirations.
SIDEBAR: The generations with birth years and pics
Figure 1
Matures:
1945
and prior
Defining
the
generations
Matures:
Baby Boomers: 1946-1964
1945 and prior
Each generation
Generation X: 1965-1978
has a broad brush
Baby Boomers:
personality that brings
1946-1964
Millennials: 1979-1996
different priorities,
perceptions, talents
Generation X:
and styles Centennials:
to the
1965-1978
1997-present
societal conditions
Millennials:
common to all cohorts.
1979-1996
These acculturation
biases withstand the
Centennials:
test of time.
Meet the Millennials
1997-present
Quick Facts
According to the U.S. Census Bureau’s Statistical Abstract of th
Meet the Millennials
Quick Facts
n According to the U.S. Census Bureau’s Statistical Abstract
of the United States: 2012, just over 69 million babies were
born between 1979 and 1996. Although this population
rate put them second to Baby Boomers in terms of generation size, the aging Boomer cohort will imminently make
way for Millennials’ emergence as the most economically
and culturally important cohort in the United States.
n 42% are married or part of an unmarried couple living together; 55% have never been married
n 36% are parents (compared to 78% of Xers, 79% of Boomers)
n Millennials are the last majority Non-Hispanic White generation, 41% of Millennials are Hispanic, African American, or Asian American
Bubble, Bubble, Bust and Struggle
The formative experience of the Millennial generation has
been one of ups and downs, highs and lows, leaps forward and
big stumbles backward. This generation grew up through two
bubbles, two busts, two wars and two centuries. They see new
possibilities, new approaches to success and new ways of living that are seemingly arriving daily. Globalization and cultural diversity have created a cross-pollination of ideas that they
are eager to soak up.
Drilling Down: A Values Roadmap
Capturing the marketplace potential of Millennials requires an up-to-date understanding of the unique characteristics and qualities the generation brings to lifestyle choices and
marketplace decisions.
An experience of authorship:
Emboldened by a keen sense of importance (both at the individual and generational levels) and an unprecedented level of
technology-proficiency, Millennials have always been invested
in defining their own dreams, inventing their own solutions
and asserting their
will in the marketplace. Remember, the
generation-defining
individualism of Baby
Boomers has hardly
waned and Boomers, in turn, have not
raised their Millennial
children to be any less
individualistic. In fact,
Millennials grew up
in a world of unprecedented self-invention,
a world in which they
have had the power
and control needed to
participate in the creation (and the meaning) of all sorts of options—from blogging,
to creating your own
running shoes to voting someone “off the
island.”
67% of
Millennials say it
is important that
others see them as
someone who can
always see through
exaggeration
and hype.
Source:
The Futures Company
A demand
for authenticity:
Millennials prize and practice being true to themselves—
and they are happy to let others be true to themselves as well.
Millennials appreciate clarity and take pride in their ability to
see through hype and exaggeration.
Expectations
of autonomy:
Millennials relish independence, express comfort with doing things ‘my own way,’ regardless of how others approach
life, and are more likely to try new things. Millennials’ individuality coexists alongside a powerful team ethos characteristic
of this generation. Millennials are just fine standing out within
the crowd.
It’s often a matter of what we call “Immediascene™-- large proportions of
Millennials report exploiting their smartphones in retail settings. This opinion
dominion creates a sense among Millennials that “I’m always everywhere with
everyone,” fueling a belief that their purchases—blessed by friends and fellow
shoppers—are both savvy and socially secure.
Little appreciation for
custom and convention:
Social
conventions and hierarchies
have little intrinsic
value to Millennials. This is perhaps
most visible in the
way Millennials approach their journey
through life: the
Millennial trajectory
through life is by desire and will, rather
than adherence to
traditional linear life
stages. Greater flexibility in expectations
and life choices with
fewer
constraints
on personal identity means that many
Millennials are rejecting pre-designed and
narrowly
defined
Source:
roadmaps to their
future, with many
The Futures Company
delaying their transition into the typical
notion of adulthood.
As discussed earlier, Millennial priorities are—at least presently—depressing homeownership numbers. This is a tangible
marketplace expression of Millennials’ reluctance to blindly
Millennials:
Prefer a life that’s
exciting but not
secure or stable:
35%
Prefer a life that’s
secure and stable
but not exciting:
65%
follow established conventions. Two long-term trends, both
growing for decades and now at unprecedented levels among
young people today, are pushing hard against Millennials becoming homeowners. Simply put, my-life-my-way Millennials aren’t facing the same lifestyle needs as prior generations
at their age. One of these trends is the age of first marriage:
young people today are not only marrying later, they at marrying at record later ages. The average age of first marriage has
been rising ever since it bottomed out with Baby Boomers who
married in their very early twenties. In fact, only 26 percent of
18- to 32-year-olds are married today, compared to 48 percent
back in 1980 when the Boomers were that age.
The other of these two long-term trends is the age at which
women first have children. As with marriage, it is at a later
age than ever—just shy of 26 years old today, and first births
among women in their late thirties and early forties are on an
upward trend and are occurring in record numbers.
Passion points:
Believing “stuff weighs you down,” many Millennials are
more drawn to contentedness “my way” than they are to cash,
cars and castles. Under Millennials’ watch, cars went from an
avatar of youthful freedom to a costly burden.
Technology is a well-known passion point for the Millennials. As digital trailblazers, Millennials grew up using technology fluidly and fluently. Millennials made the digital world
their own, they mapped it and they helped establish the rules.
It’s not an exaggeration to say that technology is the new
status symbol for many Millennials, replacing such bedrock aspects of life as clothes and automobiles. In fact, as John Morris,
a retail analyst at BMO Capital Markets lamented about the
falling demand for clothes, “You try to get them talking about
what’s the next look, what they’re excited about purchasing in
narrowly defined roadmaps to their future, with many delaying their
transition into the typical notion of adulthood.
Figure 2
a less structured path through life
apparel, and the conversation always circles back to the iPhone
6,” he said. “You get them talking about crop tops, you get a
nice little debate about high-waist going, but the conversation
keeps shifting back.”
Among Millennials
I could not get by without my cellphone/smartphone
62%
I would like to be able to make payments by
scanning my smartphone
52%
I would rather communicate via text message than talk on
my cell phone/smartphone
56%
Interested in a wearable device that records video of your every waking moment
45%
Looking at digital uptake within financial services, the
chart below shows that young, high-net-worth investors often
prefer digital to direct contact with their advisors.
High Net Worth Individuals* Worldwide Who Prefer
Direct vs. Digital Interaction with Wealth Managers,
by Age, March 2013
% of respondents in each group
<40
29.1%
20.2%
40-49
24.8%
24.0%
50-59
22.9%
32%
60-69
21.7%
38.2%
Total
23.7%
30.7%
 Digital contact
 Direct contact
Note: top-3 box on a 10-point scale; *with $1+ million in investable assets
Source: Acpgermini and RBC Wealth Management, 2013 WorldWealth Report, June 5, 2013
168595
www.emarketer.com
A new reality: Confidence tempered by reality and hardship:
Shaped by Boomer (aka helicopter) parents and an education system obsessed with protecting, guiding and instilling
self-esteem, Millennials grew up extremely ambitious, with
an unshakeable confidence that they would get where they
wanted to go quickly and easily thanks to the various personal
strengths that made them each unique and special.
Now, careening from the longest peacetime economic expansion in history to the worst economic downturn in seventyfive years, pummeled by a challenging job market, and faced
with ongoing changes to the fabric of society, the way Millennials look at life has been fundamentally altered. Their overconfidence has been forcibly removed, their sanguine sense
of security has morphed into a heightened awareness of risk,
their youthful boldness has mellowed into an outlook that has
dialed down the daring and keyed up the caution.
Even as the economy continues to improve, this altered
mindset still prevails. Asked whether they’d prefer a life of dull
stability or exciting volatility, more Millennials say they’re content with a happy humdrum.
Stressed and self-aware:
Stress continues to come at people of all ages from all directions. The average person is confounded by negative as well as
positive triggers: they’re bombarded by choices yet intrigued
by options, too many to-dos, too little trust. Stress, of course, is
a risk factor for both anxiety and depression, leading to a new
urgency inspiring more conversation about—and response
to—mental illnesses and disorders.
Millennials are by no means immune from rising emotional
and mental health problems. The American Psychological Association’s “Stress in America” report found that the gap between
adults who say stress management is important and those who
say they manage their stress effectively is widest among Millennials. Nineteen percent of Millennials say they have been told
they’re suffering from depression, compared to 12% of Boomers and 11% of Matures. (Source: The American Psychological
Association, 2013). And In the fall of 2010, the annual UCLA
Freshman Study found an all-time low of 52% rated their emotional health in either ‘the highest 10 percent or ‘above average.’”
(Source: The Freshman Study, conducted annually since 1966
by the Higher Education Research Institute at UCLA)
“There’s a lot of evidence that millennials don’t drive as much—or care as much
for cars in general—as previous generations their own age did. They’re less likely
to get driver’s licenses. They tend to take fewer car trips, and when they do, those
trips are shorter. They’re also more likely than older generations to get around by
alternative means: by foot, by bike, or by transit.”
(Source: washingtonpost.com/blogs, 2014)
Success recalibrated:
In the face of newfound difficulties and
a road ahead that was
clearly less straightforward than they’d been
led to expect, Millennials did not flounder
long.
Rather, they
gathered their wits
and began tackling
the uncertainty they
faced. In true Millennial fashion, the
transformation was
quick and dramatic. A
generation regrouped
with a new mantra:
Don’t abandon expectations for success;
cope and reconstruct.
Success by coping
is about succeeding
by trying; what constitutes success is effort, perseverance and
adaptability,
rather
than fortune. In other
words, grit, not get;
playing the game is
more significant than
winning or losing.
Success by reconstructing is about
measuring happiness
less by its market
Source:
value and more by the
The Futures Company
meaning behind it.
Be creative: play the
hand you are dealt to
make something that fits your lifestyle. Be adaptable: never
forget that flexibility trumps planning in an uncertain world.
Significantly, as they worked through revising their expectations, Millennials set about paying down revolving debt at
rate no one thought possible. In fact, today debt is now a major
factor shaping Millennials’ view of success.
60% of
Millennials say
being debt free: is a
sign of success and
accomplishment.
43% of
Millennials say they
are “very/fairly”
worried about
getting out of debt.
39% of
Millennials say
their debt level is
ruining the quality
of their life.
“Earlier” financial savvy:
“A January 2014 survey of U.S. investors by UBS
Wealth Management found that Millennials’ risk tolerance was more closely aligned with seniors who lived
through the Great Depression than Gen X or Boomer
generations.” (eMarketer, February 2014, Digital Investors: Drawing From a Portfolio of Growing Online and
Mobile Options)
Today, more consumers are feeling an urgent need to
build financial capabilities from a younger age. Needless to
say, young people have shifted their financial expectations and
strategies based on what they saw happen during the Great
Recession and its aftermath. We can expect this to translate to
a proactive approach to retirement planning and saving.
Ann Clurman is an Executive Vice-President at The Futures
Company. Described by US News and World Report magazine
as “one of the best researchers and generation-watchers,” Ann is
a nationally recognized authority and lecturer on American consumers. She is the co-author of Generation Ageless: How Baby
Boomers Are Changing the Way We Live Today…And They’re
Just Getting Started (2007) and Rocking the Ages, The Yankelovich Report on Generational Marketing (1997). Ann is also coauthor of Coming to Concurrence: Addressable Attitudes and
the New Model for Marketing Productivity (2004), excerpts of
which have been published in BrandWeek and DIRECT.
Rob Callender is Director of Youth Insights for The Futures
Company and, in that capacity, serves as the company’s Youth
Global Knowledge Lead. During Rob’s 15 years at The Futures
Company, he’s appeared in such news outlets as the Associated
Press, Mashable, USA Today, NPR, the Wall Street Journal, CNN,
Hollywood Reporter and Billboard, among others.
About The Futures Company
The Futures Company is an award-winning, global strategic
insight and innovation consultancy. Unparalleled global expertise in foresight and futures enables The Futures Company to
unlock new sources of growth through a range of subscription
services and research and consulting solutions. The Futures
Company was formed through the integration of The Henley
Centre, HeadlightVision, Yankelovich and most recently, TRU.
The Futures Company is a Kantar company within WPP
with teams in Europe, North America, Latin America and Asia.
www.thefuturescompany.com Follow The Futures Company on Twitter @FuturesCo and Facebook.
What matters most on the dating scene today? According to The New York Times,
an increasing number of daters today are placing priority not on looks, shared
interests or intention of starting a family, but on the prospective partner’s credit
score. Sites like www.creditscoredating.com give prospective dates insight into “the
only grade that matters after you graduate.” (Source: The New York Times, 12.12)
A Millennial Guide to Life
Developing winning strategies around Millennials requires understanding their
expectations, ambitions and life skills. Here’s a sum-up to get you on your way.
MILLENNIALS…..
Expect to live their lives in constant, even relentless transition,
defined by technology and connections
Relish the possibility of and satisfaction of reimagining everything
Are determined to live life on their own terms and timeframes,
often ignoring traditional milestones (e.g., home ownership)
Know the future will be challenging and that they will have to
work harder to succeed than ever before
Appreciate the virtue of having a back-up plan for
inevitable glitches and setbacks
View debt as a paramount factor in their personal
sense of accomplishment
Need flexibility and the ability to co-create from the marketplace
Are accustomed to a heightened state of security and risk
Expect to have conversations with brands, often in real time
Value brands and institutions that stay true to their essence
Evaluate organizations on their degree of authenticity,
integrity, and good corporate citizenship
Feature Article
U.S. Macro Outlook 2015
U.S. Macro Outlook 2015:
Spirits Unleashed
By Mark Zandi
Moody’s Analytics U.S. Macro Forecast for 2015
n Growth should accelerate in 2015 as higher wages
spur more spending, construction and investment.
n The sharp fall in oil prices will slow energy
production but still be a net gain for the economy.
n How fast the Federal Reserve raises interest rates,
and how markets respond when they do, will be key
to the coming year’s economic story.
n As more millennials begin forming households,
housing demand and construction will take off.
n The aging population and a slower pace of
technological change could weigh on the economy’s
long-term potential.
n Problems in Europe and China have the potential to
hinder the U.S. expansion in 2015.
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I
The U.S. is also vulnerable
n general, 2014 was a good year for the U.S. economy, to a softer global economy. With
and 2015 should be even better.
the euro zone and Japan flirtThe most encouraging development of the past year ing with recession, and China’s
was the rapid decline in joblessness. At the current pace growth steadily throttling back,
of job growth, the economy is fast approaching full em- the U.S. trade situation will
ployment. The next critical step in the economy’s return to full erode. This will be made worse
health is a meaningful acceleration in wage growth, which ap- by the recent surge in the value
pears imminent.
of the dollar, which is sure to
Most surprising has been the recent slide in oil prices, which, continue. If conditions don’t get
if sustained, will provide a significant boost to growth. The U.S. any worse overseas, the U.S. reproduces a lot more oil than it used to because of the shale revo- covery should hold firm. This is
lution, and falling prices will take a toll on future energy develop- a big if.
ment, but the country is still a significant net consumer of oil. As
U.S. Macro
Forecast
consumers
put. less of what they earn into their gasoline tanks,
therefore, the holiday shopping will receive a lift.
Arguably the biggest disappointment in 2014 was the
The other developing conerate in 2015
ashousing
highermarket.
wages
spur
spending,
sideways
The
surgemore
in mortgage
rates inconstruction
late cern is theand
U.S. investment.
economy’s weak
2013 and tight mortgage credit hurt home sales and construc- potential growth rate. Underlyices willtion.
slowButenergy
production but still be a net gain for the economy.
mortgage rates have receded and the credit spigot ing labor-force and productivity
beguninterest
to open. Many
who
have delayed
form- when
growththey
remains
weakness
willyear's
help re-economic
Reservehas
raises
rates,millennials
and how
markets
respond
do,disappointing.
will be keyTheir
to the
coming
ing households will begin to do so soon as the job market im- turn the economy to full employment more quickly, but if they
proves, moreover, making housing a more significant source do not improve growth will be weaker over the longer term. A
of growth.
persistently
low rate
egin forming
households, housing demand and construction
will take
off.of new business formation, which is the
fodder for innovation and productivity gains, adds to worries.
it is premature
to conclude that the economy’s
n and a slower pace of technological change could weigh onHowever,
the economy's
- term
long
potential.
supply side won’t come back to life as full employment apnd China have
the potential
to hinder
the U.S.
expansion
in 2015.The U.S. has a surfeit of potential workers who
This highlights
a key threat
to the economy
in the
coming proaches.
year; namely, the chance that the Federal Reserve will begin to stepped out of the job market during the tough times; some of
raise interest rates. The Fed needs to engineer short- and long- them will step back in as wage growth and job opportunities
d year for
the
U.S.
economy,
shouldjobbe
eveninbetter.
term
rates
higher,
consistentand
with 2015
the improving
market,
return. Business formation and investment should also recover
a way that keeps the housing recovery on track. Policymakers as the psychological shadow of the Great Recession fades and
have all the tools they need and have gained valuable experi- risk-taking revives.
elopment
past yearwith
wasfinancial
the rapid
decline in joblessness. At the current pace of job growth, the economy is
enceof
inthe
communicating
markets.
Yetnext
the process
of normalizing
monetary
mayto
not
be health is a meaningful acceleration in wage growth,
oyment. The
critical
step in the
economy
’spolicy
return
full
as graceful as we hope.
A key missing ingredient to a stronger
economy has been real wage growth. Despite
the increasingly robust job creation, the econFigure 1 Better Economic Times Ahead
omy is still climbing out of the deep hole created by the Great Recession. Unemployment
and underemployment are now falling fast,
%
but there is still slack in the labor market equal
4
10
to approximately 1.25% of the labor force.
 Unemployment rate (R) ▪▪▪▪ Real GDP growth (L)
At the current underlying pace of job
9
growth—about 225,000 per month—this slack
will be absorbed by mid-2016, assuming stable
3
8
labor force participation. If participation picks
7
up as disenfranchised workers come back into
the labor force, the economy will return to full
2
6
employment by the end of 2016.
Although full employment is still some
5
distance away, wage growth should soon pick
up. Data indicate it already has begun to do
1
4
so. For much of the recovery, wages have
10 11 12 13 14 15F 16F 17F 18F 19F 20F
grown only about 2% per year, the rate of
Sources: FDIC, Moody’s Analytics
inflation. This means workers have not been
ok 2015: Spirits Unleashed
Weaker potential
Apartment
construction
is already the
bright spot in the
housing market,
and it is sure to
get brighter.
The Fed factor
Wage resurrection
entist
slack in the labor market equal to approximately 1.25% of the labor force.
At the current underlying pace of job growth
—about 225,000 per month
—this slack will be absorbed by mid
-2
force participation. If participation picks up as disenfranchised workers come back into the labor force,
U.S. Macro Outlook
2015
employment by the end of 2016.
Although full employment is still some distance away, wage growth should soon pick up. Data indicate
much of the recovery, wages have grown only about 2% per year, the rate of inflation. This means wor
increases in productivity, and is why the profit share of national income has risen to a record high.
rewarded for increases in productivity, and is
why the profit share of national income has
risen to a record high.
As the economy reaches full employment, pay should grow fast enough to cover
both inflation and productivity gains. Assuming underlying productivity growth is
near 1.5% per year, nominal annual wage
growth should steadily accelerate to 3.5%
over the next two years.
Figure 2
Wage Growth set to Accelerate
2001 Q1 to current
4.0
3.5
3.0
Y-axis=Employment cost index
private wage and salary,
% change yr. ago, 2-qtr lead
Current
ook good. Wages as measured by data from human
- resource company
ADP tell an even more positive story.
2.5
Spend versus save
2.0
Evidence is mounting that this anticipatge growth will supportedstronger
consumer
’t save
donit all. Given the wealth effects powered by
acceleration
has begun. spending
Wage growthas
aslong as consumers
X-axis=Unemployed
1.5
measured
by thesaving
employment
index, the
k prices and better housing
values,
ratescost
should,
if anything, per
decline.
Easier
job opening,
# credit and more relaxed consumer attitudes
most comprehensive and consistent measure
1.0
owing also point to lower
saving and greater spending.
of compensation, hit bottom at 1.5% three
0
1
2
3
4
5
6
7
years ago. Growth is now definitively above
BLS, Moody’s Analytics
2%, and thesentiment.
trend lines look
good. Wages as
es should also boost consumer
Perceptions
aboutSources:
the economy
have been lackluster despite the better job marke
measured by data from human-resource comudge the economy based
is rising
and could
whether
’smore
average
year
payofincrease
consumers
mean this
purchases
big-ticket was
items
panyon
ADPwhether
tell an eventheir
morepay
positive
story. faster than inflation,
such
as
vehicles,
whose
sales
are
already
back
to
prerecession
Stronger
wageuntil
growth
will Improved
support stronger
consumer
last year
’s. This has not been
the case
now.
moods
among consumers could mean more purchases
- ticket
of big
spending as long as consumers don’t save it all. Given the levels because of lower gas prices and easy credit. Next could
as vehicles, whose saleswealth
arethe
already
backreaches
to prerecession
levels because
of lower
gasfast
prices
and easy
credit.
Next
could be
As
economy
full employment,
pay should
grow
enough
to cover
both
inflation
andhous
pro
effects powered by record stock prices and better hous- be houses, sales of which have been flat since mortgage rates
jumped
more
than
a
year
ago.
ch have been flat sinceing
mortgage
rates
jumped
more
than
a year,
yearEasier
ago.
productivity
growth
is near
1.5%
per
nominal annual wage growth should steadily accelerate to 3
values, saving
rates
should,
if anything,
decline.
credit and more relaxed consumer attitudes toward borrowing
also point to lower saving and greater spending.
prise
Spend
savealso boost consumer sentiment. PerHigherversus
wages should
Further boosting both consumer spirits and the economy’s
ceptions about the economy have been lackluster despite the
better job market. Americans judge the economy based on prospects is the surprising slide in oil prices. At near $60 per
sting both consumer spirits
and
economy
’s prospects
isanticipated
the surprising
slide
incrude
oilhas
prices.
At near
per
barrel,
crude prices
Evidence
ispay
mounting
that
this
acceleration
begun.
Wage
growth
as
measured
barrel,
prices
have
fallen$60
about
40%
since
summer.
Ifby the e
whether
theirthe
is rising
faster
than
inflation,
and whether
sustained,
lower
prices
will
lift
global
real
GDP
growth
rates
this
average pay
increase
was will
bigger
last of
year’s.
about 40% since summer.
Ifyear’s
sustained,
lower
prices
liftthan
global
real
GDP growth hit
rates
in 2015
more
than
halfago.
a percentag
comprehensive
and
consistent
measure
compensation,
bottom
at by
1.5%
three
years
Growth
in 2015 by more than half a percentage point, and just under
ust under that in the U.S.This has not been the case until now. Improved moods among
MOODY'S ANALYTICS / Dismal Scientist / Copyright© 2014 / www.dismal.com that in the U.S.
Saudi Arabia is crucial to where oil prices
Figure 3 Global Economy
are headed next. The Saudis’ decision not to
gets an Energy Boost
scale back production to offset supply growth
in the U.S. and elsewhere was the proximate
cause for the plunge in prices. Softer global
% change in 2015 real GDP due to lower oil prices
demand growth and a robust dollar also
contributed, but if Saudi Arabia had reined
India
in production as it has in times past, prices
Turkey
would have held firm.
Japan
The Saudis appear to believe that the
China
global
surfeit of oil is here to stay and the burEuro zone
den of balancing supply and demand must be
Global
shared more broadly. They can financially abU.S. Based on WTI of $70
sorb the fall in revenue, at least for a while,
U.K. per barrel in 2015
given the savings they built when prices were
Canada
high. A lower global oil price also likely fits
Norway
their geopolitical strategy. Saudi Arabia’s adRussia
versaries—Iran, Russia, and the insurgency
-1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0
calling itself the Islamic State—are all sufferSource: Moody’s Analytics
ing badly from the lower prices.
Energy surprise
a is crucial to where oil prices are headed next. The Saudis
’ decision not to scale back production to offset supply growth in the
Bottom of the barrel?
Tight mortgage credit combined with a previous jump in
We believe oil is close to a bottom, and will slowly climb
mortgage rates significantly
back to $100 per barrel over the next three years. Lower prices
crimped first-time homebuyers.
will eventually force cuts in production, mostly where costs are
The lack of first-timers makes it
high, such as the North Sea and the Arctic, but even investment
difficult for trade-up buyers to
in low-cost U.S. shale production will weaken. Lower prices
sell their homes, ultimately hurtwill also prop up oil demand—possibly faster than expected,
ing sales of new homes and sinjudging from a recent surge in sales of gas-guzzling SUVs.
gle-family construction.
The principal economic beneficiaries of this will be conThis too should change soon.
sumers, who will enjoy what amounts to a meaningful tax cut.
Mortgage finance giants Fannie
In the U.S., this is expected to equal close to $100 billion in
Mae and Freddie Mac recently
2015, or 0.6% of income. Global oil-related investment and prosignaled a greater willingness
duction will be hurt, but U.S. shale producers, whose average
to lend by lowering their minibreak-even cost is closer to $60 per barrel, should do relatively
mum down payment requirewelt. On net, the oil price decline is expected to lift U.S. GDP
ment from 5% to 3%. They have
growth next year by 0.4 percentage point.
also relaxed the representations
and warranties they require on
the loans they buy. This should
ease lenders’
about bedisappointing,
but
that
is
expected
to
change
in
2015.
While
homeconcerns
sales, construction,
prices and rents have
Housings recovery has been disappointing, but that is
ing forced to buy back loans that
to change
in 2015.
While
home
construction,
housingexpected
bust ended
three
years
ago,
thesales,
market
is far from
normal,
least
in terms
eventually
getat
into
trouble,
thus of sales and construction.
prices and rents have come a long way since the housing bust
encouraging
more new15%
lending.
now roughly
with
household
incomes,
but
sales
are still almost
below what would be considered
ended consistent
three years ago,
the market
is far from
normal, at
least
Housing starts are expected to ramp up from just over 1
terms
of sales and construction. House prices and rents are
are off byinone
- third.
million units this year to nearly 2 million units in 2017. This
now roughly consistent with household incomes, but sales are
is much more than the estimated 1.7 million units required to
still almost 15% below what would be considered typical, and
meet demand
in a typical
reflects the unleashing
of been slow
k by a combination
of
factors.
The
heretofore
tough
job
market
has been
hardyear,
onand
millennials,
who have
housing starts are off by one-third.
pent-up demand by those millennial households.
Housing
has beenmore
held -back
by -ayear
combination
of factors.
are more than
3 million
to
18 34
34year- olds living
with their
thanalso
there
werea prior
tojobs.
the
Theparents
increased today
construction
represents
lot more
The heretofore tough job market has been hard on millenniAll
the
current
slack
in
the
labor
market
will
be
absorbed
by
enty
- andals,
early
- thirty
thirty- somethings
form households
who
have been
slow to formwill
households.
There are moreand move into apartments as the job market tightens.
stronger housing construction.
thanbright
3 millionspot
more in
18 to
34 housing
year-olds living
with their
parents
already the
the
market,
and
it is sure to get brighter.
today than there were prior to the recession. Many of these
twenty- and early-thirty-somethings will form households and
bined with
previous
jump
in mortgage
rates significantly
crimped
- time
first
homebuyers. The lack of first
- timers
movea into
apartments
as the
job market tightens.
Apartment
Forecasting interest rates is generally foolhardy, but a
construction
is
already
the
bright
spot
in
the
housing
market,
buyers to sell their homes, ultimately hurting sales of new
homes
and single
- family
quickly
improving
economyconstruction.
makes it prudent to prepare for
and it is sure to get brighter.
higher rates over the next several years. If everything sticks roughly to script, the Federal
Mortgage
Lending
Reserve will normalize short- and long-term
Figure 4
Standards Remain Tight
rates as the job market tightens. More jobs
and stronger wage growth will trump the ill
% of originations by vintage of credit score
effects of higher rates on the housing market
and broader economy.
100
When the economy is healthy, the fed90
 700+  660-699  620-659  <620
eral
funds rate should be approximately 4%
80
and
the 10-year Treasury yield closer to 5%.
70
While much improved from recent years,
60
the U.S. economy is far from healthy. Full
50
employment is still in the distance, infla40
tion remains stubbornly below the Federal
30
Reserve’s target, and the financial system is
20
adjusting to stiffer regulatory requirements
10
and increasingly tough capital and liquid0
ity standards. The Fed’s balance sheet is also
05
06
07
08
09
10
11
12
13
14
bloated with Treasury and mortgage securities following several rounds of quantitative
Sources: Equifax, Moody’s Analytics
easing. This will put downward pressure on
The most
encouraging
development of
the past year was
the rapid decline
in joblessness. At
the current pace
of job growth, the
economy is fast
approaching full
employment.
Hopes for housing
Interest rate risk
entist
Figure 5
Slow Exit by the Fed
Assets held outright on the Fed’s balance sheet, $ bil
4,500
Forecast
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
06 07 08 09 1 0 11 12 13 14 15 16 17 18 19 20 21 22 23
Source: Moody’s Analytics
proaches, bond investors may panic again.
They may fear that the Fed will be forced
to raise short-term rates more aggressively
to contain inflation. Housing and the global
economy would be hurt, posing a threat to
our sanguine outlook.
Given the surprising decline in long-term
rates this year, it is also worth considering
that they may remain lower longer than
anticipated. With the Bank of Japan aggressively buying bonds and the European Central Bank likely to step up its own bond purchases, U.S. long-term rates could also be held
down. Stiffer bank liquidity requirements,
which require large multinational banks to
hold larger and more liquid bond portfolios,
may also contribute. Lower than expected
long-term rates would be a plus for housing
and economic growth.
Overseas trouble
long-term rates until these securities mature, which could take
The U.S. economy is less sensitive than most to changes in
until the 2020s.
global conditions, but it isn’t immune. And there is plenty of
ests that the Fed
’s normalization
interest
should
occur slowly.
Policymakers
willWith
begin
short
rates
in mid
All thisofsuggests
thatrates
the Fed’s
normalization
of interest
trouble overseas.
the raising
value of- term
the
dollar
surging,
the- U.S.
rates
should
occur
slowly.
Policymakers
will
begin
raising
balance
is sure
deteriorate.
Global
es won
’t approach 4% until early 2018. The 10
- year Treasury yield, currentlytrade
near
2.25%,
won
’to
t make
it back
totrade,
5% which
on a to date
rates in mid- 2015, but rates won’t approach 4% hasn’t been a factor in the U.S. recovery, will soon become a
asis for the foreseeableshort-term
future.
until early 2018. The 10-year Treasury yield, currently near meaningful drag.
2.25%, won’t make it back to 5% on a consistent basis for the
Most worrisome are the euro zone’s travails. The singleforeseeable
future.may not follow the’sFed
currency
region
flirting
with another
recession,
its unders are notoriously fickle,
and they
script. This could
be seen
in isthe
summer
of 2013,
whenand
then
- Fed
But bond traders are notoriously fickle, and they may not employment is already painfully high. Political fissures are
n Bernanke began talking
ending
QE. could
Traders
thought
Bernanke
signaling
rise
-member
term
in short
rates,
and
followabout
the Fed’s
script. This
be seen
in the summer
of was
widening
in nearlyan
all imminent
the euro zone’s
countries.
Eu2013,
when
then-Fed
Chairman
Ben
Bernanke
began
talking
ro-skeptic political parties with mixed commitments to meetnds. Long
- term rates jumped.
about ending QE. Traders thought Bernanke was signaling an ing their nations’ debt obligations are gaining strength. If one
imminent rise in short-term rates, and they sold bonds. Long- of these parties appears set to gain control of a government,
ves
term rates jumped.
global investors could again question the European resolve to
keep the euro zone together. Another round of financial turmoil would ensue.
moved quickly to calm traders
’ nerves, and bondInvestor
yields nerves
have since receded, but the housing market was hurt badly. Emerging
Fed
officials
moved quickly
hat rely on foreign bond investors to fund large current account
deficits, such as Brazil, India, South Africa and Turkey, are still
to calm traders’ nerves, and bond The ECB steps in
Euro-skeptic
ith the aftermath of that spike in rates.
yields have since receded, but the
The European Central Bank is expected to forestall such a
housing market was hurt badly. scenario. The ECB has ramped up its bond-buying program in
political parties
economies that rely on recent months by purchasing covered bonds and asset-backed
larly debilitating surge in long
- term rates seemsEmerging
less likely
given their decline this year, but it’tcan
be dismissed. As the economy
foreign bond investors to fund securities. This won’t be enough, however, and the ECB will
with mixed
ull employment, wage growth picks up andlarge
the first
Fedaccount
rate hike
approaches,
bond investors
may
panic
current
deficits,
next buy supranational
European
bonds,
suchagain.
as thoseThey
issuedmay fea
commitments
such
as
Brazil,
India,
South
Africa
by
the
European
Investment
Bank.
It
will
be
politically
harder
will be forced to raise short
- term rates more aggressively to contain inflation. Housing and the global economy would be hurt,
and Turkey, are still struggling for the ECB to buy individual nations’ sovereign bonds, but it
to
meeting
eat to our sanguine outlook. their
with the aftermath of that spike is increasingly likely to do so. While the economic stimulus
in rates.
won’t be as large as those provided by quantitative easing in
nations’ debt
Another similarly debilitating the U.S. and U.K., it could still help by lowering the euro’s value
prising decline in long
- term rates this year, it is surge
also worth
considering that they may remain lower longer than anticipated.
in long-term rates seems and countering deflation fears.
obligations
are
k of Japan aggressively buying bonds and the
Central
Bank
uptoits
own
purchases,
- term
U.S. long
lessEuropean
likely given their
decline
this likelyItto
is astep
stretch
think
the bond
ECB’s actions
can jump-start
the
gaining
strength.
year,
but
it
can’t
be
dismissed.
euro
zone
economy.
That
requires
broad
economic
and
fiscal liquid
lso be held down. Stiffer bank liquidity requirements, which require large multinational banks to hold larger and more
As the economy approaches full
reform, particularly in France and Italy. It is also reasonable to
up and the first Fed rate hike ap-
debt crisis. That would be a problem for the U.S.
ios, may also contribute. Lower than expected
-long
term rates
be a plus
forthehousing
economic
employment,
wagewould
growth picks
worry
ECB won’tand
do enough
to head growth.
off another European
uble
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China
China’’s struggles to hit its own economic growth targets poses another threat. Chinese policymakers re
structural problems, and have been willing to give up some growth to address them. Most notably, Ch
overbuilt,
- owned enterprises are unproductive. Corruption
U.S. Macro Outlook
2015and speculation has been rampant. Many state
degradation epic.
Most disconcerting, leverage has soared in China, comparable to other countries that have suffered sev
is held by local governments and financial institutions that have financed the runaway real estate activi
Growth and risk in China
Figure 6
Ominous Echoes in
China’s Debt Growth
China’s struggles to hit its own economic
growth targets poses another threat. Chinese
Gross debt as a % of GDP 5 yrs before financial crisis
policymakers recognize they have significant
275
structural problems, and have been willing
13pp
32pp
to give up some growth to address them.
250
43pp
Most notably, Chinese real estate markets are
225
overbuilt, and speculation has been rampant.
24pp
Many state-owned enterprises are unproduc200
38pp
tive. Corruption is endemic and environmen175
tal degradation epic.
150
Most disconcerting, leverage has soared
in China, comparable to other countries that
125
have suffered severe financial crises. Much
100
of this debt is held by local governments and
U.S.
U.K.
Japan
S. Korea
China
financial institutions that have financed the
(2003-07)
(2003-07)
(1986-90)
(1994-98)
(2009-13)
runaway real estate activity.
Each time reform efforts have hit growth
Sources: Various government sourcse, Moody’s Analytics
too hard, however, Chinese officials have
eased up and provided monetary and fiscal stimuli. Most re- timated potential has been a dismal 1.3% per year. This reflects
cently, the Chinese central bank surprised financial markets both lackluster labor productivity growth of 1%, and paltry labor
by cutting rates. China’s growth slowdown hasn’t been pain- force gains weighed down by falling participation.
Each
have That
hit growth
too hard, however,
Chinese
less,
buttime
so far reform
it has beenefforts
well-managed.
China’s financial
A poor potential
growthofficials
rate has have
allowedeased
slack inup
theand
la- provid
system
is relatively
closed and
authorities
aresurprised
able to quickly
bor market
to be absorbed
morerates.
quickly.’China
once full
employrecently,
the Chinese
central
bank
financial
markets
by cutting
sBut
growth
slowdown
hasn
’t
change policy has helped.
ment is achieved, unless potential picks up, economic growth
been well- managed. That China
’s financial system iswill
relatively
closed
andhurt
authorities
are able
to quickly ch
slow sharply.
This will
living standards,
particularly
for lower-income households, and undermine the government’s
precarious fiscal situation.
Putin's choices
Still, balancing reform and growth isn’t easy, and China’s
The fall in potential growth rates was in part anticipated.
managers may stumble. It wouldn’t take much of a misstep to The large baby-boom cohort has begun to retire in recent years,
undermine
already- reform
reeling global
weak-China
reducing
labor forcemay
participation.
More
than half
the decline
Still, balancing
andcommodity
growth ’isn
tmarkets,
easy, and
’s managers
stumble.
It wouldn
’t take
much of a m
en fragile emerging economies, and upset financial markets. in participation since the recession hit is attributable to retiring
reeling
globalwouldn’t
commodity
weaken fragile
emerging
and
upset
financial
T
The
U.S. economy
survive markets,
this storm unscathed.
boomers.
Some ofeconomies,
the slowdown is
likely
temporary,
related markets.
to
Russia’s
economic problems are by themselves not a rea- the recession and its fallout. Fewer job opportunities have also
storm
unscathed.
son to worry, but the pressure they put on Russian President contributed to lower participation and less foreign immigration,
Vladimir Putin could be. Sharply lower oil prices, Western eco- which is important to the growth of the working-age population.
Russiasanctions
’s economic
are by
nomic
due to problems
Russia’s incursion
intothemselves
Ukraine, and not a reason to worry, but the pressure they put on Russ
the
collapsing
ruble
and
resulting
higher
inflation
and interest sanctions due to Russia
be. Sharply lower oil prices, Western economic
’s incursion into Ukraine, and the colla
rates are suffocating Russia’s economy. The government’s fisinflation
interest
rates are
suffocating
Russia
’s economy.
government
situation
is also
cal
situationand
is also
rapidly eroding.
How
Putin will respond
LaggingThe
productivity
growth’sisfiscal
also probably
partly
cycli- rapidly
to
difficult
to forecast.
It is equally
to imagine
cal, reflecting
dark psychological
shadow of theorrecession
tothis
thisis is
difficult
to forecast.
It iseasy
equally
easyhim
to imagine
himthereining
in his adventurism
ramping it up
reining in his adventurism or and uncertainty created by political brinkmanship in Washingimplications for globalramping
and U.S.
economic growth.
it up. His choices could ton. Businesses have been especially nervous, reluctant to use
have large implications for global the cash they have built up during the recovery to expand and
and U.S. economic growth.
fund more investment. Entrepreneurs have also been underWhat ’s the U.S. potential?
standably wary about starting businesses.
Growth potential is thus expected to revive as the recession
fades
and full employment
approaches.
Some
signspotential
indicate grow
As the U.S. economy approaches full employment,
attention
will shift to
the economy
’s weak
As the U.S. economy approach- this may be occurring, as labor force participation has stabilized
es full
employment,
attention
will/ www.dismal.com
over the past year despite continued boomer retirements. ForMOODY'S ANALYTICS / Dismal
Scientist
/ Copyright©
2014
shift to the economy’s weak po- eign immigration should rebound with the better job market,
tential growth rate—the pace at and business confidence and investment have recently been
which the economy can consis- much better. Over the next five years, potential growth should
tently grow without generating rise to 2.25% per year, equal to 0.75% labor force growth plus
inflationary pressures. Since the 1.5% productivity growth.
Great Recession, the economy’s es-
Putin’s choices
Shadows of the recession
Despite these
reasonable
concerns, betting
against the
American economy
remains a bad
strategy.
What’s the U.S. potential?
Structural risks
However, there is a meaningful risk that this is overly optimistic. Structural impediments to labor force and productivity
growth may not quickly recede. Workers who stepped out of
the job market during the tough times may not return, at least
not to the degree hoped for. Their skills and marketability may
have eroded so significantly that they are unable to find suitable work.
The animal spirits that drive business formation and investment could also remain bottled up. An aging population
may prove more of a brake on risk-taking than thought. Entrepreneurs tend to start companies in their thirties, and there
is a dearth of thirty-somethings. An even more disconcerting
possibility is a downshift in the pace of technological change.
Perhaps technologies such as 3D manufacturing, drones and
DNA sequencing don’t stack up to the productivity-enhancing
power of the internet, which fueled growth in the 1990s and
early 2000s.
Don’t bet against the U.S.
Despite these reasonable concerns, betting against the
American economy remains a bad strategy. The U.S. has
clearly had a difficult run over the past 15 years, and has been
scarred by terrorism, wars and technology and housing bubbles. Lower- and middle-income households have seen living
standards decline. But the bad times are likely ending. Many
of the economic wrongs have been righted. Households have
deleveraged, the financial system has recapitalized, and U.S.
businesses have reduced their cost structures and are highly
competitive. Serious problems remain and politics complicate
our ability to address them. But if history is any guide, we will.
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The next critical
step in the
economy’s return
to full health is
a meaningful
acceleration in
wage growth
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Feature Article
The Intricate Art of Today’s
Mortgage Underwriting
By Jerry DeMuth
New scoring models, more experienced underwriters and more manual decision
making are all part of today’s landscape for underwriters.
The Intricate Art of Today’s Mortgage Underwriting
Mortgage underwriting continues to change. Once
too loose, then perhaps too tight, it now may be
inching back closer to middle ground. n But there’s
also little doubt, in most cases, that the underwriting
process is being done more thoroughly, with many
more steps required of the underwriters themselves.
This is especially the case as more underwriting is
done at least partly manually. And FICO® scores
by themselves are becoming less determinative.
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“O
ver the last two years, underwriting has definitely
changed from what it was five or 10 years ago, with
all the QM [qualified mortgage] restrictions [around]
the ability to repay. That’s where a lot has happened,’ says Donald J. Frommeyer, a loan originator
at Mortgage Services III LLC (MSI), Indianapolis, and chief executive officer and immediate past president of the National
Association of Mortgage Brokers (NAMB), Washington, D.C.
“But for the most part, I don’t know if underwriting has gotten better or worse-but it’s gotten different,” says Frommeyer.
“Now, some lenders spend a lot of time wanting to look
more at bank statements, wanting to know more about employment. It’s just a difference in the lender. I still think they’re
making good aggressive decisions on underwriting. But they’re
all striving for that ability to repay and making sure customers
fall within the guidelines.”
“Just like anything, there’s a pendulum,” explains Mat Ishbia, vice president, marketing, at Troy, Michigan—based United Wholesale Mortgage. “It [underwriting] was way too loose,
and some rules and regulations were put in place and underwriters put some overlays and protective things in place. . . .
Now it’s coming back to the middle, where it should be, where
it’s a little more reasonable.”
Underwriting, with increased emphasis on borrower creditworthiness, often is no longer being left solely to automated
underwriting (AU) systems, even when conventional mortgages are being underwritten. There’s increased use of manual
underwriting, something that the Federal Housing Administration (FHA) has increasingly pushed, including when Department of Housing and Urban Development—approved (HUDapproved) housing counseling is tapped by FHA borrowers.
“Our message to lenders is that they absolutely ought to
consider whether a borrower has undergone housing counseling, because everybody knows, and we’ve done studies on thisborrowers that take advantage of housing counseling perform
much better than those who do not,” says FHA spokesperson
Brian Sullivan in an interview with Mortgage Banking.
“From a risk perspective, that’s a good thing,” he says. “However, we wouldn’t go so far as to say that housing counseling
in and of itself would overcome financial material deficiencies
in a loan application. Whether or not it makes a difference in
saying yes or no to these loan applications would be judged on
a case-by-case basis, applying our new manual underwriting
standards.”
Sullivan adds, “Broadly speaking, housing counseling is
relevant but it may not necessarily overcome material deficiencies in the application.”
“There’s been a lot of sloppy underwriting,” maintains Kyle
G. Schultz, vice president of mortgage operations at Irving,
Texas—based zIngenuity Inc., which provides contract underwriting, underwriting training, underwriting-hiring advice and
other services to smaller lenders.
“Underwriters lost their responsibility in the underwriting
process. I think that everyone was relying on inputting data
into automated underwriting systems without a complete understanding of why they needed to keep validating it.”
WHAT MAKES A GOOD UNDERWRITER?
“From what we’re seeing in terms of underwriter applications, the people we’re coming across who are applying [for
jobs] really don’t have the depth of experience we’re looking
for. Underwriters who were really just junior underwriters
and were only part of the process are the ones kind of getting
weeded out,” he says.
They may have been called underwriters, but they really
were nothing more than “income-verification clerks,” he says.
When seeking out underwriters for zIngenuity’s clients,
Schultz explains, he seeks candidates with a range of experience with different loan types and different lender types, because “quality is really driven by where people worked and
whether they’ve seen lots of different types of loans,” he says.
“There’s a stratification process that’s going on,” Schultz
says. “Lenders are being more focused on who they’re letting
do the more complex work, but at the same time there’s probably a leveraging up with talent and getting poor performers
out of the process based on quality results.”
In the struggle to find underwriters who have been trained
to understand specific types of loans, whether conventional or
specialties such as self-employed borrowers, mortgage brokers
now look to specific mortgage companies or specific underwriters within a company for placing their loans.
“There are certain lenders we know that understand our
sophisticated borrowers. They have some flexibility and understand complex borrowers,” says Gloria Schulman, founder of
Beverly Hills, California—based CenTek Capital Group, which
specializes in jumbo loans to self-employed borrowers.
Also, at these firms, she says, “Some
underwriters are more sophisticated
than others.” And it is to these specific
underwriters that CenTek’s loan packages are sent.
Frommeyer says he chooses lenders
based on what their underwriters do particularly well.
“We have certain companies that do
VAs [Department of Veterans Affairs
loans] really well, certain companies that
do FHAs really well and certain companies that do conventional business really well,” he points out, noting that this
means underwriters at these companies
are experienced at underwriting those
loan types.
Still other companies and their underwriters are especially good at handling
mortgages for first-time homebuyers,
which often requires finding alternative
credit, he adds.
Sending loans to the appropriate
companies and their underwriters is a
better and more successful option than
sending all your loans to the same company, Frommeyer makes clear.
Underwriting, with
increased emphasis
on borrower
creditworthiness,
often is no longer
being left solely to
AU systems, even
when conventional
mortgages are
being underwritten.
DIFFERENT APPROACHES FOR DIFFERENT LENDER TYPES
The approaches and methodologies used by underwriters
vary by the type of lender, explains Tisha D. Hartman, director
of real estate lending at KeyPoint Credit Union, Santa Clara, California, and former senior forensic underwriter at zIngenuity.
The most conservative and stringent are the lenders that
cater solely to the wholesale market, she says. While they may
have a particular investor that has closed out a loan niche for
them, the methodology behind the underwriting that goes into
each decision is going to be a lot more strict, she explains.
At the opposite end of the spectrum, the lenders showing the
most flexibility, she says, are the large banks and credit unions
that are going to park some of their loans in their portfolios.
Schultz says the level of understanding required of underwriters who handle such complex loans as jumbos and those
made to self-employed borrowers is “critical and [it] really demands more time and demands a better-quality individual doing that work.”
Wells Fargo Home Mortgage, Des Moines, Iowa, recognized
the different skill sets required for underwriting complex portfolio loans, 30 percent of which are non-QM, and for underwriting QM agency, FHA and VA loans, when it established separate
underwriting teams for each in the third quarter of 2013.
“It’s a very separate group of underwriters that underwrite
only portfolio loans and are located in only six locations across
the country,” says Allyson Knudsen, Wells Fargo’s executive
vice president and head of underwriting and production risk
management, who is based in Minneapolis. “And we actually have a process where we have a panel review. Loans are
brought to the panel to talk about why you would or would not
want to put the loan on the balance sheet.”
QM teams are also based in those six locations as well as
in 11 QM-only underwriting locations, she says, and all their
loans are manually underwritten after automated engines provide credit and ratio risk assessments.
In having two separate teams, Wells Fargo saw the difficulty of keeping up with the ever-changing
underwriting knowledge required of
each, even for conventional loans, she
explains.
“Because agencies change their
guidelines every day, those underwriters have to keep up with all the agency
changes, and all the FHA and VA changes,” Knudsen says. “So as clarifications, et
cetera, are sent out, we want people to
be able to absorb all that change. Same
thing on the portfolio side: That they
have expertise and judgment regarding
our policies. In today’s environment,
it’s [asking] a lot for somebody to wear
multiple hats. We believe we’ll have better execution across both if we separate
them out.”
The portfolio team has more flexibility in documentation
requirements and the judgments they can make on such things
“It’s almost like
underwriters
and loan officers
need to be private
investigators
today,” says Lane.
as child support, alimony and percentage of income available
for mortgage payments, Knudsen says.
GOING BEYOND CREDIT SCORES
Underwriting today requires obtaining and understanding
more information about borrowers or, as some players describe
it, more research and analysis.
Wells Fargo Home Mortgage no longer simply takes the
middle of the three FICO scores, according to Knudsen.
“Today we use credit reports for our lending, and analyze
and leverage those credit reports as opposed to just the score,”
she explains.
“The report tells you some things the score doesn’t. We really looked at lowering our FICOs in a couple areas and then
leveraging our underwriters’ expertise to underwrite the credit
that’s on the credit report, because there are things you can
determine today [about] why a score might be low. We want
to make sure we’re making a good decision and extending our
credit to creditworthy borrowers even if [that borrower] might
have a lower credit score.”
KeyPoint Credit Union’s Hartman says that as an underwriter, she has deviated many times from “what would be the
standard protocol, because I have a greater understanding of
what’s behind the numbers and I can make an argument and
present that to the end investor or to the agency and get them
to buy off on it because I understand the methodology. So it’s
not always just about filling in the box-it’s about really understanding what you’re looking at and how that layers into the
rest of the file.”
Underwriting, especially manual underwriting, needs to be
seen as both a science, with its guidelines and technology, and
as an art as you “extract a lot of information about a person’s
lifestyle and turn that into something meaningful and then
make a business lending decision,” Hartman points out.
Whether underwriters are using an automated underwriting system or doing manual underwriting “makes a big difference, because sometimes something doesn’t make sense on
paper but when you get the story, it does [make sense],” says
Sharmen Lane, director of education and a senior underwriting
instructor at Loan Officer School, New York.
“It’s almost like underwriters and loan officers need to be
private investigators today,” says Lane. “It’s all about research.
Everybody back in the day [before AU] used to do this.”
She adds, “So sometimes if a loan makes good sense and
you can back it up with documentation but it doesn’t quite fit
the box exactly perfect,” you still may be able sell that loan.
PROPENSITY TO PAY
Jon R. Daurio, chairman and chief executive officer of Nikkael Capital Corporation, Tustin, California, a new company
that is targeting credit-scarred, low-FICO borrowers for refinance loans, says his company is ignoring FICO scores. Instead,
after determining sufficient net disposable income, he says
that Nikkael will look at propensity to pay, which, he maintains, many people have ignored.
“What is in the borrower’s history that indicates that they
have a propensity to make the payments? There are some people that have the ability to make the payment but then they’ll
decide not to make the payment,” he says.
“We look at what caused the late payments. What actually
is the borrower’s story? And what actually happened in ensuring that that life event is unlikely to occur again or has been
resolved? The only way to determine this is with manual underwriting,” Daurio says.
His past experiences during a 20-year career, he adds,
showed that “FICO was not a good indicator of whether a borrower was a good credit risk.” As a result, he says, “I think people are getting more comfortable with making loans to people
who have hiccups in their credit.”
San Jose, California—based FICO has been actively making changes to its FICO scoring processes, beginning with the
launch of FICO Score 8 in 2009. On Aug. 7, 2014, it announced
that medical debts would be accounted for separately under
the new FICO Score 9, differentiating medical from non-medical collection-agency accounts in order to be more predictive
of a consumer’s likelihood to repay a debt.
Broker Frommeyer says that medical debt has been a problem he has encountered with some borrowers with lower credit scores. “I think [with FICO] looking at it differently is going
to help a lot,” he predicts.
Adoption, however, is likely to be slow.
ADOPTING NEW SCORING MODELS
Freddie Mac, which does accept such newer models from
the credit repositories as Equifax Beacon 5.0, Experian/Fair Isaac
Risk Model V2 and TransUnion FICO Risk Score (Classic) 04–
two of which are required for all manually underwritten mortgages–is currently analyzing the impact of FICO 8 but has not
begun on FICO 9, according to spokesman Brad German.
“Retooling the mortgage industry around a reformulated
credit score is a complex undertaking,” German points out,
with all the players having to analyze any new score’s impact
on their systems, operations and ability to evaluate and price
risk.
But many lenders and their underwriters, as well as the
agencies and FHA and VA, already have begun to look differently at medical debt.
Houston-based BBVA Compass Bank, for example, uses
“the guidelines for medical collections debt that have been set
by such specific investors as Fannie Mae, FHA and VA, and
consider the overall scope of the borrower’s credit profile,” according to Elliot Salzman, senior vice president and director of
consumer policy and underwriting for BBVA Compass.
The bank also has made changes in its underwriting in order to follow QM guidelines, he says.
“We now follow Appendix Q for all QM originations, with
government-sponsored enterprise [GSE] and/or government
products as an exception,” Salzman explains.
“We’ve also developed a broad portfolio of non-QM products. Additionally, we minimized the overlay on our FHA product, lowering our minimum score requirement to 580,” he says.
A continuing underwriting issue,
particularly with FHA mortgages, is the
use of overlays.
THE ISSUE OF OVERLAYS
Keypoint
Credit Union’s
Hartman says
overlays that
establish higher
standards is one
way for lenders
to protect
themselves from
buybacks.
KeyPoint Credit Union’s Hartman
says overlays that establish higher standards is one way for lenders to protect
themselves from buybacks, should underwriting turn out to be inadequate.
Overlays, she says, also provide more
flexibility as to what investors loans can
be sold.
“I think most lenders reacted [to the
housing market collapse] by tightening
lending standards and implementing
significant overlays,” says BBVA Compass’ Salzman. “Since then, the industry
has seen an easing of both, particularly
with FHA loans.”
Yet he admits that BBVA Compass “does have minimal
overlays in our Federal Housing Administration products.
They play an essential role in helping the bank mitigate potential risk.”
But because these overlays, like the bank’s loan guidelines,
are proprietary, Salzman says he cannot provide specifics.
Wells Fargo, says Knudsen, used credit overlays back when
it required higher credit scores for conventional mortgages.
Now, she notes, “We are looking at all our overlays as a matter
of course” to make sure the company provides “access to credit
for all customers that are credit-ready.”
That overlays might restrict loans to borrowers on the basis of race or national origin is a concern for FHA, says FHA
spokesperson Sullivan. “These credit overlays might rise to unfair lending practices,” he points out.
“We’re trying to encourage lenders to move away from all
these credit overlays, like a credit score higher than what our
standards call for, that they’re tacking on,” he says.
“Even with our backing of the mortgage, lenders still may
be reluctant,” Sullivan admits. “We’re trying to get them to
overcome their shyness and get back to lending to these creditqualified borrowers.”
“Underwriting is going to be a constantly evolving thing
for our world as we keep learning more about consumer behaviors and patterns and things like that,” says Hartman. “It’s
going to be a continuing, ongoing evolutionary process for all
lenders.”
Jerry DeMuth is a Chicago-based freelance writer. He can
be reached at demuth933 @earthlink. net.
Copyright 2014 Mortgage Banking(R) Magazine & Mortgage Bankers Association, All Rights Reserved., Reprinted with
permission
Feature Article
The Infrastructure
Predicament
By Terry Wakefield
The Infrastructure Predicament
TECHNOLOGY APPLIED TO BUSINESS
The first rule of any technology used in a business is
that automation applied to an efficient operation will
magnify efficiency.
The second is that automation applied to an inefficient
operation will magnify the inefficiency.
n Bill Gates n
Panic is setting in! In my 40 years in the residential
mortgage business, I have never witnessed a higher level
of frustration and concern by C-level executives who run
U.S. mortgage companies. This article provides a replay
of a recent series of conference calls I have had with a
number of chief executive officers who are very concerned
about the state of the operational infrastructure that
supports their respective businesses.
These calls have been condensed to a three-way
WebExTM conversation involving myself (Terry) and
fictional CEOs Drew Smart and Bill Legacy. As Frank
Webb, star of the old TV series Dragnet (now I am really
dating myself) would say, the names (except mine) have
been changed to protect the innocent.
Here’s a
three-way
conversation
about how the
origination
business can
be reimagined
with the help of
technology and
better business
process
management.
Bill Legacy: Thanks for arranging this call, Terry. Drew,
how are you doing?
Drew Smart: Thanks for asking, but I have had better days.
I just finished a board meeting, and my team and I were grilled
about the explosion in our mortgage loan production expenses,
the reduction in our transaction velocity and the mediocre customer service surveys we’ve gotten back from our borrowers
over the past year. In our defense, my chief operating officer
presented a series of figures that I’ll share with you. Can you
see my screen?
Bill Legacy and Terry Wakefield (simultaneously): Yeah,
we see it.
Drew Smart: Here’s Figure 1, average loan origination and
production expense.
One of our key directors runs a business that manufactures
wireless office equipment. When he saw this figure, he literally
screamed: “How can any industry survive a cost increase of
that magnitude? If my math is correct, costs have increased by
nearly 230 percent since 2004. This is lunacy!”
We pointed out the impact of reduced production volume,
escalating costs associated with the regulatory environment,
and our existing infrastructure’s dependence on humans to orchestrate work that leads to a very expensive hiring-and-firing
cycle to adjust to volume cyclicality. He was not impressed and
said, “We have a structural problem that needs to be addressedor we should consider getting out of this business!”
Reluctantly, we moved on to Figure 2–average days to
close.
Another one of our directors runs a logistics company that
provides consulting services to local companies with large
vehicle fleets. He’s a little more even-tempered, and asked if
we had statistics that track our transaction velocity, or average
time to close, going back 10 years. Fortunately, we were prepared for that question.
AVERAGE LOAN ORIGINATION AND PRODUCTION EXPENSE
IN DOLLARS AND AS A PERCENTAGE OF AVERAGE BALANCE
FIGURE 1
Avg. Production Expense ($)
Avg. Production Expense (% of Loan Balance)
$8,000
4.5%
Avg. Production Expense ($)
3.5%
$6,000
3.0%
$5,000
2.5%
$4,000
2.0%
$3,000
1.5%
$2,000
1.0%
$1,000
0.5%
Avg. Production Expense (% of Loan Balance)
4.0%
$7,000
0%
2014-Q2
2014-Q1
2013-Q4
2013-Q3
2013-Q2
2013-Q1
2012-Q4
2012-Q3
2012-Q2
2012-Q1
2011-Q4
2011-Q3
2011-Q2
2011-Q1
2010
2009
2008
2007
2006
2005
2004
$0
Sources: Mortgage Bankers Association (MBA), Federal Housing Finance Agency (FHFA)
FIGURE 2
Refinance
Purchase
All
TRANSACTION VELOCITY HAS
EXTENDED TO ABOUT 40 DAYS,
ADVERSELY IMPACTING REVENUE
Avg.
2012
49
46
48
Avg.
2013
45
45
46
Average Days to Close
Jan
Feb
2014
2014
44
40
47
42
45
41
Source: Ellie Mae Origination Insight Report, Sept. 2013
Mar
2014
37
41
40
Apr
2014
37
40
39
FIGURE 3
INFRASTRUCTURE COLLAPSE
Total loan production expenses (per loan)
Origination expense at 1% and assumes an
average loan ammount of $250,000
Loan production personnel expense
Loan production direct labor expense at 60%
$6,932
($2500)
$4,423
$2,659
Sources: MBA’s Q2 2014 Quarterly Mortgage Bankers Performance Report, The Wakefield Company
From 2003 through 2009, our transaction velocity averaged 15 days from
application to closing for refinance transactions and 24 days for purchase money
transactions. After a few seconds of silence, he asked if we understood the impact of transaction velocity on revenue
and customer service.
Our chief financial officer responded
that the current, much slower transaction velocity has reduced our annual pertransaction revenue by approximately 50
percent. The director sat stunned.
Another director asked how this reduction in transaction velocity impacted
our customers’ perception of our service
levels. I produced a report that showed
only 60 percent of borrowers we gave
mortgages to within the last 12 months responded that they would come back to us
for their next mortgage. The board chairman and founder of our firm rose to his feet and barked in his
Southern drawl, “Houston, we have a problem.”
Bill Legacy: Drew, I hate to admit it, but the declining profit-I mean, growing losses- in our mortgage operation caused a
similar experience at our board meeting two weeks ago. I did
not present the same slides that you did, but I was told to have
a plan in place to restore profitability to the mortgage operation within the next six weeks or the topic is going to shift to
exiting the mortgage business.
It didn’t help that I had to report we had just finalized a settlement in the amount of $220 million with the Federal Housing Finance Agency [FHFA] for mortgages delivered to Fannie
Mae in the period of 2005 to 2008.
Our chairman remarked we are now officially a member of
the “club” that has paid over $120 billion–and rising–in buybacks, legal fees, settlements and fines to various regulators
and secondary market investors. He asked if this is the end of
our exposure. I could not reassure him.
Terry Wakefield: Bill and Drew, I can assure you that you
are not alone. We hear stories like yours every day. Some executives blame the Consumer Financial Protection Bureau
[CFPB] and/or FHFA. Some blame the inevitability of volume
cyclicality. Others blame government policies that encouraged
the extension of credit to people who could not possibly repay
their mortgages. Others blame greedy loan officers and unscrupulous third-party loan originators.
There is no question that the subprime crisis was fed by a
chain of greed that permeated the entire spectrum of mortgage
lending and servicing, but playing the blame game ignores the
real problem.
Drew, your director is correct. The mortgage industry has a
structural problem that relates directly to outdated operational
infrastructure. Fortunately, a small but growing number of
lenders are facing facts and admitting that their current infrastructure is to blame and must be reconfigured if they are going to prosper in this business.
Bill Legacy: Terry, I agree with youbut every time we explore options, we
are faced with evaluating the capabilities
of the traditional loan origination system
[LOS] vendor community. Something is
missing. What is it?
Drew Smart: Ditto. Where can we
turn?
Terry Wakefield: Before we go down
that path, let me take control of the WebEx and show you Figure 3-the infrastructure collapse.
This dives a little deeper into Drew’s
first figure. Like Drew, we subscribe to the
Mortgage Bankers Association’s [MBA’s]
Quarterly Mortgage Bankers Performance
Report.
Historically, loan production direct labor expense represents approximately 60
percent of loan production expense. But,
in first-quarter 2014, the industry reached
a historic high of $3,315 per closed loan. In second-quarter
2014 things improved, but loan production direct labor costs
remain over $2,600 per closed loan.
This stunning statistic points to the industry’s fundamental infrastructure problem. Humans continue to orchestrate
the work. Since 2003, we have conducted detailed process
architecture analysis in 34 different loan production environments representing all channels of origination. While there is
a perception that individual lenders have some form of ‘secret
sauce’ that drives their respective loan production environments, our experience demonstrates just the opposite.
All lenders preform the same tasks, but not necessarily in
the same order or by workers with the same titles. Lets face
it–for the past several years, more than 90 percent of all mortgages have been purchased or securitized by government-sponsored enterprises [GSEs] Fannie Mae, Freddie Mac or insured
by the Federal Housing Administration [FHA]. So, if 90 percent
end up with the GSEs or FHA, one would think that a common
manufacturing process would exist to produce mortgages in
the United States, and that platform would significantly reduce
production costs over time.
Bill Legacy: Terry, I think I know where you are headed.
A few weeks ago, I had a three-hour meeting with our COO,
and we met informally with 20 of our most experienced loan
production personnel. They were honored we would take time
to have a frank discussion on how they did their jobs and what
we could do to make them more effective.
After an hour or so, light bulbs started going on. It was
clear that each of these capable individuals had their own
workarounds to overcome the deficiencies of the systems they
use to produce loans. These workarounds take the form of Postit® notes on computer screens, notebooks in desk drawers or,
worst of all, memorized tasks that reside in their respective
minds. We have 220 people in this particular production environment. I finally asked the audience: “Do we have 220 different processes in place?” They all agreed.
“The mortgage
industry has a
structural problem
that relates directly
to an outdated
operational
infrastructure.”
Terry Wakefield
“How is it possible
to control costs,
ensure compliance
and deliver great
customer service
when you have 220
undocumented
and unsanctioned
processes in place?”
Wakefield
Terry Wakefield: Bingo! Bill, you just
hit the nail squarely on the head. How is
it possible to control costs, ensure compliance and deliver great customer service
when you have 220 undocumented and
unsanctioned processes in place? It’s impossible.
Drew Smart: Terry, you and I have
had this discussion before. Lenders do
not think of themselves as manufacturers.
We tend to obsess over the complexities
of mortgage lending rather than focusing
on the common attributes of loan production. We’re always emphasizing increased
market share and topline revenue growth.
It sounds like we need to shift greater focus to process definition and technology
that can execute a uniform, well-defined
process.
Terry Wakefield: Let me offer a relevant quote from Bill
Gates here. He said, “The first rule of any technology used in
a business is that automation applied to an efficient operation
will magnify efficiency. The second is that automation applied
to an inefficient operation will magnify the inefficiency.”
That absolutely nails it. I cannot recount how many times
we have witnessed lenders applying technology to an inefficient process. The outcome is as predictable as Gates’ quoteinefficiency magnified.
Bill Legacy: OK, I am not going to quibble with Bill Gates.
But I have six weeks to convince my board that we should stay
in the mortgage business. Let’s talk about an action plan that
will make the case resonate.
Terry Wakefield: The first thing to do is to use proven tools
to define the current state in your loan production environment. You’re already off to a good start based on your threehour meeting. I would involve those 20 people you have already gathered and break them into their respective functional
divisions of labor. Interview them to find out; 1) the names of
the tasks currently performed; 2) who performs the task; 3)
when pipeline fallout occurs; 4) how frequently the task occurs; 5) the calculation of adjusted task time to the fraction of
a minute; and 6) the calculation of task cost to the penny.
My guess is that after three to four weeks, you will have
concurrence from these 20 people that there are currently 300
to 350 different tasks taking place in the current state. These
tasks result in a direct labor cost of approximately $2,600 per
closed loan.
Once current-state definition is completed, you will have a
valuable baseline of direct labor cost data that you can use to
conduct return on investment [ROI] analysis on the technology
investments necessary to achieve an optimized state.
Drew Smart: Terry, I am confident that we already have a
good handle on our loan production direct labor cost. Our current direct labor loan production expense is right around $2,800
per closed loan. Can we bypass this first step and move on?
Terry Wakefield: Sure. Each time we have analyzed a
loan production environment, we have stored the output into
what we refer to as the INPLOREtm Task
Level Database. INPLORE now contains
detailed information on more than 3,700
specific loan origination and production
tasks. Using INPLORE in collaboration
with your production managers and supervisors, it is possible to create what we
refer to as an optimized production time
summary [OPTS]. It is critical that senior
compliance personnel are involved in this
effort to ensure that the OPTS output represents a compliant, optimized production environment.
Documenting the optimized state focuses
on three objectives:
c Removing non-value-added activities.
We often hear frustration regarding workers checking and rechecking the work performed by others.
c Improving workflow, consolidating job functions and eliminating functional divisions of labor. Functional divisions of
labor create expensive bottlenecks in cyclical industries like
mortgage lending.
c Defining tasks that can be automated through deployment
of software components not available in traditional loan origination systems.
Definition of an optimized process includes task level metrics
similar to those used to define the current state. That is, the
OPTS describes: the human or system that performs the task;
the impact of fallout; task frequency; adjusted task time; and
adjusted task cost.
Upon completion of process optimization, the number of
tasks performed in the loan production environment is typically reduced to a range of 110 to 130 tasks-down from 300 to
350 in the current state. Of those 110 to 130 tasks, somewhere
between 40 percent and 50 percent are automated, meaning
that the task count performed by humans is reduced from 300
to 350 down to 55 to 78 tasks. Direct labor production costs are
reduced to a range of $550 to $650 per closed loan, depending
on the production channel.
Drew, in your case this would produce a savings of $2,150
to $2,250 per closed loan. So, if you are closing 20,000 loans
per year, you will realize direct labor cost savings of more than
$40 million annually.
Drew Smart: You definitely have my attention.
Bill Legacy: Mine, too. So, how does this process architecture optimization work translate to automation?
Terry Wakefield: That’s the $64,000 question. Once the optimized state is defined at the task level, it must be thoroughly
documented at a step level. Think of tasks as defining what
work must be performed and steps as describing how each
task is performed. Documenting step-level descriptions of task
performance is hard and unglamorous work.
Bill Legacy: How is this possible, given the variability that
surfaces as loans are produced?
Terry Wakefield: That’s a great question, Bill. Task-level
detail addresses this variability by defining required tasks
“The LOS needs
to be demoted
in importance so
that the software
components...enable
automated work
orchestration.”
Wakefield
that apply to all loans and random tasks
that occur on an unscheduled basis or are
required based on loan-specific circumstances. Variability is a reality in most
manufacturing processes. The next time
you’re on the freeway, focus on the variability of cars you see. Managing this variability requires human definition of an
optimized manufacturing process and a
heavy dependence on technology.
Bill, to answer your question about automation, think of task-level detail as the
sheet music that allows best-of-breed technology components to automate work orchestration and eliminate human interference with the optimized process. Because
task-level detail defines the optimized process down to the step
level, it also serves as the training manual for new employees
and those who want to improve their value to the enterprise by
learning cross-functional skills. Thus, task-level detail ensures
that there is no disconnect from what workers learn and how
they actually perform their work tasks.
Bill Legacy: So, task-level detail is the “code” that drives
software performance. What are these software components
that are not typically imbedded in an LOS?
Terry Wakefield: Before I describe those software components, let me emphasize that current LOSes do perform many
functions very well. They have solid product and pricing engines, most are effectively integrated with settlement services
providers and documentation preparation firms, and they
can all ingest output from point-of-sale systems used by loan
originators. So, I am not suggesting that you replace your LOS.
However, the LOS needs to be demoted in importance so that
the software components I am about to describe enable automated work orchestration.
Drew Smart: I am happy to hear that, because we just
spent a lot of money changing our LOS.
Bill Legacy: We did the same last year-and to be honest,
we have not experienced the productivity gains we expected.
Terry Wakefield: Bill, we hear your message from a lot of
lenders. Getting back to Bill Gates, no technology will improve
an inefficient process.
Bill Legacy: So, let’s talk specifics.
Terry Wakefield: Before I describe these software components, I should mention that they are all commercially available and have proven their value in many industries. Inexplicably, they are not prevalent in the mortgage industry.
The first of these is business rules management software
[BRMS]. Traditionally, business rules have been hard-coded directly into applications, like an LOS. Business logic is the most
volatile aspect of a business application; however, the pains
of maintaining rules in application code have become more
obvious and significant as the pace of business demands more
agility. Agility requires that you externalize business rules logic
and manage this logic in a way that is easy to build and easy
to integrate as decision services while still meeting your enterprise performance and scalability demands.
Drew Smart: The last word I would
use to describe our loan production environment is agile. We are very dependent
on our LOS vendor to effectuate change,
and it costs us a lot of money. Have you
had direct experience using business rules
management software?
Terry Wakefield: We recently completed a project for a retail mortgage lender to build a prototype with one of our
business partners. In a matter of days, one
of our senior process architects authored
hundreds of rules to automate dozens of
mundane tasks contained in task-level detail. No programmers were required-just a
gifted process architect with an intuitive
understanding of business logic as defined in task-level detail.
Bill Legacy: I get the concept of extracting business logic
from a hard-coded application. In fact, our head of IT met with
a BRMS vendor at the last MBA technology conference, and he
was impressed. Let’s hear more.
Terry Wakefield: The next software component is business process management software [BPMS]. All commercially
available BPMS vendors deploy process-mapping tools to create process maps that drive automated work orchestration.
Going back to the prototype project, we took six tasks in
task-level detail and used a leading BPMS vendor’s processmapping tool to create a process map for each of the six tasks.
Using easy-to-use click, drag and drop functionality, the same
process architect I referred to earlier completed the six process
maps in two days. Again, no programmers involved.
Drew Smart: What do you mean by automated work orchestration?
Terry Wakefield: Simply stated, BPMS pushes work tasks
to the right worker at the right time. Workers do not request
tasks; tasks are pushed to workers as the BPMS engine determines when a task needs to be performed. Each time a task is
pushed to a worker, the worker’s performance is monitored in
real time per the metrics in the OPTS and task-level detail. If
a worker has not performed a specific task in a while and is
unsure of the steps to follow, each task pushed to a worker is
accompanied by a link to that task’s task-level detail. So, there
is only one source that guides each worker’s performance-the
BPMS process maps that emanate from task-level detail. If a
task is not in task-level detail, it cannot exist in the production
environment.
Bill Legacy: So, the problem of having 220 different processes disappears?
Terry Wakefield: Exactly, Bill-but let me go further. As
certain tasks designated by compliance or management are
performed, BPMS triggers automated internal and/or external communication through a set of management-prescribed
alerts, escalations and scripted messages. The time-stamping of
tasks, the tracking of worker performance and the monitoring
of task outcome creates an audit trail of all task performance
in the production environment. This level of auditability is precisely what the industry needs in order to proactively respond
to the demands of the CFPB and other regulatory agencies.
Drew Smart: We have our first CFPB exam in two months,
and we are more than a little nervous.
Terry Wakefield: That’s a good segue to the third critical
software component- enterprise content management software [ECMS]. To deal with the avalanche of paper received
from external sources and produced internally, we advocate
establishing a document management center [DMC]. It would
focus on digitizing all data received from external sources using ECMS and depositing all digitized data in a borrower- specific virtual loan file.
Based on our experience, there are approximately 4,000
discrete data elements in a closed loan file. Advances in ECMS
have made it possible to extract those 4,000 discrete data elements from the documents they reside on, and deposit those
data elements into the virtual loan file along with an image of
all external and internally produced documents.
Bill Legacy: Wait a minute. Are you suggesting that we
process all of our loan transactions electronically? Is that even
legally possible?
Terry Wakefield: E-SIGN [Electronic Signatures in Global
and National Commerce Act] legislation enacted in 2000 permits a lender to conduct a mortgage transaction in a purely
electronic fashion, provided that the borrower consents. The
way communication patterns are changing, I am convinced
that a growing percentage of borrowers will consent to an electronic transaction versus the painful fulfillment experience
that currently plagues the industry.
Drew Smart: So, we may need two fulfillment environments-one that caters to borrowers who consent to an electronic transaction and another for those who don’t.
Terry Wakefield: You’re right, but I would look at it with
a different twist. You already have the non-electronic environment. Why not launch a greenfield project to build the electronic environment, and expand it as more borrowers consent?
You can control the expansion of the electronic environment
by inviting borrowers as electronic capacity scales. I’d bet that
within three years, you’ll be processing more loans in the electronic environment than in the current one.
Bill Legacy: Terry, I have to get to another meeting in 15
minutes. Can we wrap this up?
Terry Wakefield: Sure, Bill. Let me conclude.
Assuming the borrower consents to an electronic mortgage process, let’s look at the consequences. The DMC’s role
in digitizing all external documentation received from the borrower, and storing the images and extracted relevant data from
those images in a borrower-specific virtual loan file, prevents
any paper from entering the loan production environment and
enables a paperless workflow. Production workers have access
only to the virtual loan file as tasks are pushed to them. BPMS
provides access to only that segment of the virtual loan file that
is relevant to the task the worker receives.
Best-of-breed ECMS continually populates the virtual loan
file with images and data extracted from external documents
and all documents produced internally during the loan production process. BPMS continually updates the virtual loan file
with data on worker task performance.
So, in concert with BPMS, ECMS enables a borrower-specific virtual loan file
that includes an audit trail ofcall of the approximately 4,000 discrete data elements aggregated during the loan origination and production process;
cthe performance of all tasks contained in a task-level detail, including
the system or worker who performed
the task, task duration, task cost, task
outcome and task- specific alerts, escalations and messages;
c all internal and external communication, including voice, email, text messages and social media interactions
that occurred during the loan origination and production process;
“The tension
between mortgage
lenders and
secondary market
lenders is totally
unconstructive and
has imposed an
expense of more
than $120 billion
on the residential
mortgage industry.”
Wakefield
c all documents received from the borrower and other external sources, and
all documents produced internally,
including federal and state-specific disclosures and time
stamps of when all documents were delivered to the borrower; and
call secondary market transaction documentation and, if
you also service loans, all loan servicing and loss-mitigation
transaction data.
Basically, the virtual loan file provides 100 percent data
transparency of the entire loan life cycle. This is profound
compared with today’s environment, where loan-level data is
trapped in myriad systems and databases.
Now, the coup de grâce. The virtual loan file allows secondary market investors to conduct their quality control of
loans prior to the funding of the loan by the lender, basically
eliminating buyback exposure. The tension between mortgage
lenders and secondary market investors is totally unconstructive and has imposed an expense of more than $120 billion
on the residential mortgage industry. The technology exists to
dissipate this tension and re-establish trust through the deployment of best-of-breed technology.
Drew Smart: Pardon my skepticism, but do you have any
additional information you can send me and our COO that
goes into greater detail? If you do, and it validates this call,
we’ll want to meet with you soon.
Bill Legacy: Terry, send it to me as well.
Terry Wakefield: I’ll send you both a PowerPointTM deck
later today. Thanks for your time today. I really appreciate it.
Terry Wakefield is chief executive officer of The Wakefield
Company LLC, Mequon, Wisconsin. He can be reached at [email protected].
Copyright 2014 Mortgage Banking(R) Magazine & Mortgage Bankers Association, All Rights Reserved., Reprinted with
permission
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Market Share
Market Share–
Credit Unions
Are Holding On!
Tracy Ashfield
This time last year I talked about mortgage loan market
share for credit unions and the pride that went with seeing it
climb to 6.5% at the end of third quarter 2013. The question I
posed is, would credit unions be able to hold on to that share in
2014? We knew we wouldn’t be riding the refinance wave, and
the share would instead have to be earned with purchase loans.
Well, it feels great to be here in January 2015 and know the
share didn’t just stay stable, it grew. As of third quarter 2014,
credit union market share had grown to 8%.
Impressive. And the credit goes to all the lenders who developed purchase money business plans. For some it was a focus
on professional development: recruiting sales leaders and creating compensation plans that motivated folks to get out there
and ask for the business. For others it was creating niche products designed to help first-time homebuyers achieve their dream
of home ownership. I also watched credit unions tighten their
belts and work to develop operational efficiencies to ensure they
could offer competitive pricing. Many used a combination. One
thing for sure: lenders networked, rallied together and stay determined to be their members’ choice for home loans.
As you review the Top 300 ranking report and historic
share, take a look at how the share of ARM loans has increased
in 2014. It hasn’t topped 15% since 2006, when I suspect the
increase was driven by interest rates.
What is at work this time? I believe much of current ARM
lending involves loans that don’t meet the Qualified Mortgage
requirements. We continue to hear that most credit unions
are committed to making non-QM loans, but the absence of a
secondary market causes liquidity concerns. I have seen some
amazing niche ARM products this year. Kudos to the credit
unions working hard to meet the needs of members that might
otherwise fall outside the QM box!
I suspect in the near future we won’t have to speculate
about non-QM statistics. Why? Today the NCUA 5300 call
report is noticeably silent on the topic of QMs. My guess is,
before too long we’ll see Schedule A amended to address nonQM lending. More to report, yes, but if the reporting requirements change, we may have more than anecdotal information
on non-QM lending. Stay tuned.
Credit Union 1st Mortgage Market Shares 1989 - 2014
9%
8%
7%
6%
5%
4%
3%
2%
1%
Sep 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
0%
Market Share
Credit Union market share didn’t just stay stable, it grew.
As of third quarter 2014, CU market share had grown to 8%.
Credit Union 1st Mortgage Market Shares Detail 1989 - 2014
CU Share
Credit Union 1st Mortgages Total U.S. Residential (MBA) of Total U.S.
Year
$ Granted (Blns)
% ARMs
# Granted (000’s)
Average
Mort Orig (Blns)
Originations
1989
6.410759,8134531.41%
1990
6.210062,0004581.35%
1991
7.511863,5595621.33%
1992
16.523669,9158941.85%
199319.5
281
69,395
1,020
1.91%
1994
13.320465,2927691.73%
1995
10.0014967,2046391.56%
1996
15.6020775,5087851.99%
1997
17.3021680,0568342.07%
199831.90
360
88,734
1,656
1.93%
199928.00
308
91,027
1,379
2.03%
200020.60
216
95,415
1,139
1.81%
200146.60
421
110,794
2,243
2.08%
200262.30
523
119,187
2,852
2.18%
200388.23 18.37%
719
122,666
3,810
2.32%
200457.20 16.55%
422
135,501
2,772
2.06%
200560.44 14.79%
408
148,309
3,027
2.00%
200654.44 15.16%
360
151,425
2,726
2.00%
200760.31 12.54%
363
166,163
2,307
2.61%
200870.29 12.50%
412
170,713
1,509
4.66%
200995.01 8.20%
574
165,620
1,995
4.76%
201084.51 8.45%
510
165,802
1,572
5.38%
201182.55 8.86%
513
160,994
1,262
6.54%
2012124.08 6.59%
742
167,169
2,044
6.07%
2013120.54 9.32%
702
171,724
1,845
6.53%
Sept ‘14
68.10
15.55%
389174,999844 8.07%
The Top 300
The Top 300 –
Leading the market share charge
Top 300 First Mortgage Granting CU Market Share as of September 30, 2014
$ Originated
# Originated
$ Outstanding
1st Mortgages
1st Mortgages
1st Mortgages
(Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable)
Top 300 1st Mortgages Originated CUs
All Originating CUs (3,359 CUs)*
Top 300 Share
52,592,185,603 68,104,522,773 77.2 253,116 389,165 65.0 197,886,047,256 289,017,116,438 68.5 $ Sold
1st Mortgages
17,714,480,218
22,187,986,355
80
*CUs who granted $10,000 or more 01/14 - 09/14
Top 300 First Mortgage Granting CU as of September 30, 2014
Name of
State Credit Union
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
VA
VA
NC
CA
CA
MI
WA
AK
OH
NY
CA
CA
CA
CA
UT
ID
CO
UT
OR
TX
MA
IL
TX
TX
Navy
Pentagon
State Employees’
Kinecta
First Tech
Lake Michigan
BECU
Alaska USA
Wright-Patt
Bethpage
San Diego County
Logix
Patelco
SchoolsFirst
Mountain America
Idaho Central
Elevations
America First
OnPoint Community
Security Service
Digital
BCU
Randolph-Brooks
University
$ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold RE Loans Sold
(Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages but Serviced by CU
$5,574,302,908
$2,989,833,137
$2,158,851,575
$1,655,356,538
$1,001,455,835
$903,173,498
$807,704,721
$784,119,817
$702,924,185
$653,093,475
$637,582,750
$554,874,480
$492,528,672
$463,507,385
$450,324,118
$428,769,154
$425,110,881
$422,859,914
$409,169,083
$399,347,524
$396,656,410
$373,479,171
$370,411,024
$370,010,325
23,464 7,327 14,445 3,723 2,695 6,602 3,289 3,231 5,572 2,183 1,681 1,540 1,286 1,553 3,380 2,712 1,597 4,312 3,752 2,113 1,266 1,791 1,942 1,357 $19,332,762,669
$10,285,450,847
$12,939,098,631
$1,713,682,947
$2,721,966,081
$1,665,180,706
$3,117,412,076
$633,319,943
$489,414,596
$2,022,945,238
$2,823,135,274
$1,833,941,120
$1,599,409,743
$2,153,474,185
$1,314,679,379
$556,178,205
$467,855,631
$766,032,587
$922,659,344
$1,005,504,130
$2,077,108,970
$841,742,634
$1,713,957,268
$612,089,671
$2,025,910,046
$285,301,163
$1,419,889
$1,169,812,370
$248,633,732
$748,256,435
$243,380,172
$683,467,289
$260,197,948
$241,427,738
$70,083,524
$111,502,921
$89,770,654
$66,742,207
$168,245,284
$261,497,914
$265,815,971
$225,665,249
$148,523,066
$68,707,919
$120,050,329
$197,469,437
$25,675,803
$218,624,781
$19,915,180,751
$4,416,976,855
$254,774,509
$3,343,849,160
$2,669,786,623
$4,728,863,300
$3,531,400,523
$4,495,209,832
$2,875,346,614
$3,274,976,134
$703,169,352
$941,550,267
$1,086,504,548
$1,665,393,366
$1,206,202,628
$862,390,732
$1,532,149,717
$2,221,068,018
$1,148,434,744
$91,716,488
$1,055,055,354
$1,694,454,748
$297,974,354
$98,346,807
The Top 300
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
WI
WI
CO
NC
WI
CA
WI
WI
IL
PA
IL
CA
IA
MO
GA
AZ
DC
CA
CA
WA
CA
CA
FL
TN
NY
NC
NY
CA
FL
WI
FL
CA
NY
CA
CO
TX
CA
CA
VT
CA
OR
CA
NY
NY
TX
IA
Community First
Summit
Ent
Coastal
Royal
Chevron
University Of Wisconsin
Landmark
Alliant
Citadel
CEFCU
The Golden 1
University Of Iowa Community
CommunityAmerica
Delta Community
Desert Schools
Bank-Fund Staff
Premier America
Star One
WSECU
Mission
KeyPoint
VyStar
Eastman
State Employees
Local Government
CAP COM
Provident
GTE Financial
Altra
Suncoast
California
Visions
Evangelical Christian
Bellco
Advancial
Redwood
Xceed Financial
New England
Stanford
Advantis
Wescom
Teachers
Hudson Valley
TDECU
Veridian
$357,922,599
$356,643,109
$345,035,105
$339,231,638
$325,934,448
$310,112,869
$308,986,333
$306,014,432
$302,681,590
$295,956,646
$293,437,067
$284,798,889
$282,211,835
$279,290,771
$269,155,707
$268,563,442
$266,209,179
$265,547,963
$259,301,662
$259,121,690
$251,043,300
$247,078,789
$240,013,263
$232,732,568
$231,114,744
$218,059,603
$216,485,688
$213,770,660
$213,765,548
$211,117,044
$209,011,803
$208,438,758
$207,687,500
$207,578,046
$205,062,178
$204,058,161
$197,811,650
$193,050,351
$192,228,939
$185,732,758
$182,776,538
$180,985,040
$180,844,132
$179,536,450
$176,222,875
$174,964,640
2,781 2,173 1,889 1,031 1,440 994 1,759 2,097 512 730 1,599 1,168 1,704 1,463 1,296 1,816 554 340 724 824 656 367 1,720 1,875 1,762 1,771 1,415 484 1,243 1,231 1,614 477 992 61 1,055 592 611 371 1,041 269 694 577 689 903 1,308 1,188 $1,191,174,837
$833,640,273
$1,466,170,097
$901,046,518
$629,614,042
$1,684,154,321
$309,634,575
$849,917,667
$3,570,937,067
$858,051,184
$2,123,639,848
$1,568,905,470
$1,237,166,236
$587,863,787
$1,348,853,492
$430,097,263
$1,734,560,556
$908,872,118
$2,429,702,821
$435,349,572
$695,126,493
$374,579,125
$1,844,053,552
$1,448,532,391
$662,619,564
$400,483,237
$530,006,489
$743,978,493
$362,632,136
$385,093,220
$1,748,498,880
$430,360,979
$1,210,715,010
$681,882,558
$761,932,904
$433,702,080
$952,922,004
$535,815,497
$462,634,825
$676,115,216
$371,314,401
$759,401,332
$1,099,209,937
$694,127,028
$715,164,681
$742,326,598
$6,780,100
$131,124,718
$35,724,406
$141,723,919
$120,193,025
$0
$211,584,000
$174,345,769
$25,567,394
$30,880,887
$0
$10,491,559
$207,770,855
$250,370,142
$26,408,599
$257,127,137
$24,131,495
$8,953,250
$0
$81,426,588
$58,838,450
$163,877,653
$52,168,265
$206,917
$114,046,372
$150,321,720
$78,099,252
$76,196,110
$183,153,895
$107,814,405
$3,919,843
$57,785,436
$5,935,818
$134,690,777
$49,917,401
$89,608,196
$73,616,600
$9,571,812
$122,863,746
$40,855,687
$85,992,447
$61,259,850
$48,487,007
$90,235,671
$102,611,995
$55,399,161
$5,206,569
$1,404,681,461
$680,486,548
$1,118,941,618
$1,539,435,683
$21,838,463
$1,147,534,919
$1,565,361,787
$196,458,768
$347,694,914
$120,482,777
$392,643,311
$121,781,643
$1,359,957,343
$297,409,014
$1,618,011,287
$457,336,307
$233,072,609
$12,232,895
$1,281,810,257
$784,529,102
$167,681,588
$298,127,237
$7,271,034
$1,233,765,593
$0
$765,585,074
$1,180,144,491
$1,379,566,637
$810,348,491
$408,136,363
$591,864,289
$79,666,808
$1,193,362,970
$521,950,086
$296,826,178
$557,106,579
$66,598,954
$1,242,459,348
$468,193,408
$629,225,901
$1,211,378,033
$1,298,305,151
$1,249,458,004
$306,398,565
$584,820
Long
Great Partnership.
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BOKFinancial
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BOK
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offersaafull
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Ginnie Mae securities in the U.S. In addition, we retain the servicing on every loan we purchase.
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Mae securities in the U.S. In addition, we retain the servicing on every loan we purchase.
We exemplify our dedication to the success of our clients and partners by providing solutions
We exemplify our dedication to the success of our clients and partners by providing solutions
that help them to retain and continue to meet the needs of their own customers.
that help them to retain and continue to meet the needs of their own customers.
Advantages to partnering with us:
Advantages to partnering with us:
• Non Solicitation Agreement
• •Non
Solicitation
Agreement
Reverse
Referrals
Limited Overlays
• •Reverse
Referrals
• Limited Overlays
• Common Sense Approach
CommonForward
Sense Purchase
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••Straight
••Valued
Partnership
and Communication
Straight
Forward Purchase
Review
• Valued Partnership and Communication
We have the experience and capabilities you want to satisfy the needs of your customers.
We
have us
thetoexperience
andcan
capabilities
you want to satisfy the needs of your customers.
Contact
learn how we
partner today!
Contact us to learn how we can partner today!
855.890.1485 | [email protected] | www.bokfinancial.com/cms
855.890.1485 | [email protected] | www.bokfinancial.com/cms
© 2015 BOK Financial Correspondent Mortgage Services, a division of BOKF, NA. Member FDIC. Equal Housing Lender
© 2015 BOK Financial Correspondent Mortgage Services, a division of BOKF, NA. Member FDIC. Equal Housing Lender
The Top 300
71 PA
72 CA
73 AZ
74 TX
75 CA
76 IN
77 MN
78 NV
79 CA
80 PA
81 CA
82 UT
83 WI
84 CA
85 CA
86 CA
87 VA
88 MN
89 MI
90 IN
91 CA
92 MD
93 RI
94 MI
95 MD
96 IA
97 RI
98 CA
99 ND
100 MI
101 VA
102 IN
103 GA
104 NY
105 WA
106 IA
107 UT
108 CA
109 WI
110 IN
111 TX
112 WA
113 IN
114 NY
115 VA
116 NY
Police And Fire
Firefighters First
Arizona State
American Airlines
Technology
Forum
Wings Financial
One Nevada
NuVision
Members 1st
SAFE
Goldenwest
Westconsin
Travis
Financial Partners
California Coast
Northwest
TruStone Financial
Michigan State University
Teachers
Orange County’s
SECU of Maryland
Navigant
DFCU Financial
NASA
Dupaco Community
Pawtucket
Partners
Town and Country
United
Apple
Purdue
Georgia’s Own
United Nations
Spokane Teachers
Collins Community
Utah Community
San Francisco Fire
Covantage
Beacon
Navy Army Community
Whatcom Educational
Eli Lilly
Self Reliance New York
Virginia
ESL
$174,789,217
$172,687,196
$172,021,667
$165,845,490
$162,976,107
$161,189,818
$152,413,846
$152,226,396
$151,138,213
$150,249,206
$148,523,511
$147,399,135
$145,204,454
$141,177,386
$140,497,658
$139,171,938
$139,094,300
$136,138,264
$134,543,213
$134,390,711
$134,389,247
$133,533,275
$131,886,338
$130,554,703
$128,428,813
$124,498,862
$122,171,700
$121,686,259
$119,907,028
$119,819,893
$119,797,907
$119,257,630
$117,560,600
$117,273,543
$116,195,841
$114,932,270
$113,199,986
$111,510,242
$110,689,920
$109,926,388
$109,316,869
$108,833,546
$108,826,954
$108,738,195
$108,707,993
$107,305,000
1,078 393 810 869 240 804 706 801 439 1,025 609 777 1,406 595 348 478 518 708 878 630 523 648 600 794 332 883 754 442 543 567 294 563 453 322 689 721 609 258 1,080 350 872 511 554 205 668 723 $1,373,326,453
$530,769,838
$511,304,049
$1,842,505,058
$606,078,361
$304,066,770
$595,731,515
$162,879,938
$462,129,905
$574,912,012
$520,394,449
$283,623,180
$372,214,497
$375,070,830
$395,121,612
$554,207,039
$396,331,698
$285,404,142
$760,986,305
$835,020,274
$446,421,745
$1,035,999,604
$797,877,952
$675,738,883
$421,324,929
$279,377,205
$1,040,283,827
$404,089,776
$155,135,237
$717,176,771
$629,643,038
$374,353,678
$411,887,936
$1,017,950,593
$812,279,840
$321,942,469
$191,575,967
$380,422,082
$526,296,836
$596,022,182
$791,878,000
$538,200,946
$326,156,760
$647,977,524
$510,795,812
$383,693,669
$43,019,692
$6,483,465
$76,361,100
$0
$6,821,883
$91,530,159
$55,397,179
$121,598,605
$67,990,386
$69,420,579
$87,168,933
$88,994,932
$89,565,130
$54,294,659
$49,026,706
$40,560,397
$108,978,279
$100,052,326
$341,295
$2,048,859
$38,963,867
$76,663,000
$23,272,372
$95,050,369
$29,793,859
$61,132,890
$10,091,722
$44,492,090
$72,198,471
$27,843,291
$46,003,434
$58,092,114
$17,887,023
$9,160,840
$8,535,016
$33,018,325
$74,508,344
$24,633,300
$13,293,153
$0
$0
$72,379,161
$32,503,684
$0
$12,813,262
$70,280,902
$511,384,762
$118,591,954
$623,246,612
$6,786,205
$176,865,519
$638,967,971
$394,576,240
$174,816,666
$449,010,628
$0
$612,775,134
$222,107
$766,241,025
$297,466,672
$555,177,118
$52,593,044
$1,466,059,667
$369,056,731
$0
$4,038,591
$283,019,064
$812,636,345
$146,543,896
$447,050,707
$16,962,584
$561,616,350
$211,895,493
$520,806,048
$0
$64,556,914
$275,250,044
$413,309,032
$70,017,900
$74,655,816
$176,991,113
$0
$65,832,698
$258,284,442
$149,957,845
$0
$0
$364,985,803
$0
$0
$180,444,215
$1,024,194,142
The Top 300
117 MN
118 NJ
119 TN
120 CA
121 IL
122 NM
123 NC
124 NY
125 NJ
126 FL
127 OK
128 WI
129 MA
130 NY
131 IL
132 CA
133 MD
134 CT
135 TX
136 CT
137 CA
138 WI
139 NH
140 WI
141 AL
142 MA
143 PA
144 WI
145 FL
146 WA
147 NY
148 NM
149 CA
150 PA
151 NY
152 VA
153 OH
154 OK
155 WA
156 VA
157 AL
158 MN
159 NY
160 FL
161 TN
162 NV
Central Minnesota
Affinity
ORNL
North Island
Deere Employees
Sandia Laboratory
Truliant
Nassau Educators
Polish & Slavic
Fairwinds
Truity
Educators
Jeanne D’Arc
Sunmark
Great Lakes
Meriwest
Tower
American Eagle
GECU
Charter Oak
Western
Capital
St. Mary’s Bank
Fox Communities
Redstone
Metro
TruMark Financial
Marine
Space Coast
Numerica
Melrose
New Mexico Educators
American First
Pennsylvania State Employees
Corning
Langley
Superior
Weokie
iQ
State Department
APCO Employees
Affinity Plus
Empower
Grow Financial
Ascend
Silver State Schools
$106,962,182
$106,796,505
$106,779,596
$106,386,961
$105,681,483
$104,118,564
$103,128,205
$102,632,060
$100,894,970
$99,205,199
$99,035,192
$98,965,847
$98,650,042
$98,058,884
$96,099,864
$95,165,672
$95,120,265
$94,615,997
$94,031,120
$93,839,835
$93,637,186
$91,905,240
$91,409,453
$90,020,840
$89,373,355
$88,202,221
$87,192,907
$87,068,581
$86,334,805
$85,592,147
$84,849,149
$84,499,445
$84,493,434
$83,746,760
$82,737,758
$82,261,455
$81,380,015
$80,585,723
$80,431,906
$80,428,141
$79,933,286
$79,769,830
$78,977,859
$78,341,973
$78,201,625
$77,859,620
597 341 751 168 638 388 748 217 420 661 505 922 256 501 284 149 399 436 973 606 292 905 501 967 625 302 358 1,100 503 481 102 462 212 613 549 573 812 411 322 237 489 533 676 478 636 319 $349,173,730
$1,183,255,835
$478,593,952
$434,949,317
$333,814,134
$639,360,838
$449,399,487
$566,103,400
$723,641,192
$511,805,555
$159,588,349
$632,365,370
$538,145,533
$138,797,935
$170,849,907
$339,158,478
$462,419,140
$413,539,088
$409,515,346
$487,896,605
$585,317,777
$461,862,887
$280,262,279
$614,612,505
$381,293,986
$444,710,147
$482,481,835
$206,137,393
$816,730,835
$376,959,663
$366,504,021
$401,086,255
$181,958,961
$444,986,710
$260,071,106
$291,903,102
$187,766,790
$261,386,669
$133,927,782
$497,252,490
$400,291,885
$414,333,939
$218,237,636
$528,672,979
$515,846,982
$324,586,867
$31,397,111
$5,187,972
$45,154,750
$7,076,750
$20,974,000
$4,321,625
$15,064,630
$28,476,000
$8,411,129
$1,945,740
$66,294,332
$9,291,219
$33,313,029
$42,532,299
$38,520,631
$142,385,850
$59,358,919
$19,082,062
$42,043,090
$16,990,490
$27,274,760
$8,272,866
$57,462,901
$4,822,500
$57,135,572
$42,098,705
$37,092,211
$57,260,143
$41,140,415
$30,938,067
$0
$41,653,144
$26,764,500
$7,354,615
$26,113,816
$9,240,700
$56,729,487
$4,812,939
$39,594,845
$43,546,725
$0
$148,365,600
$59,279,781
$21,182,771
$0
$20,600,610
$132,864,379
$225,993,419
$594,748,196
$140,760,399
$0
$0
$0
$318,492,412
$86,815,072
$146,859,140
$444,161,431
$163,659,552
$127,537,840
$0
$166,299,426
$812,491,068
$1,113,486,188
$298,630,444
$275,151,481
$117,449,753
$312,227,176
$165,297,390
$398,736,989
$62,366,417
$677,778,631
$511,318,614
$406,776,586
$575,610,813
$942,738,313
$353,011,485
$855,544
$223,186,052
$429,670,283
$262,817,931
$372,167,393
$129,941,073
$697,348,833
$155,768,112
$50,514,968
$114,718,262
$0
$1,580,167,391
$426,944,446
$140,534,735
$0
$183,916,602
The Top 300
163 WA
164 MA
165 AZ
166 MN
167 WA
168 NE
169 MO
170 CA
171 SC
172 GA
173 FL
174 VT
175 CA
176 WA
177 SD
178 PA
179 KY
180 IN
181 NY
182 CA
183 MI
184 MO
185 VA
186 MT
187 FL
188 SC
189 MA
190 CO
191 CA
192 IN
193 OR
194 MA
195 CA
196 PA
197 MI
198 OH
199 NC
200 CA
201 IN
202 AZ
203 IN
204 TX
205 NY
206 DC
207 FL
208 OH
Columbia
Workers’
Vantage West
Mayo Employees
Verity
Centris
Anheuser-Busch Employees
First Entertainment
Founders
Robins
MidFlorida
Vermont State Employees
Ventura County
Gesa
Dakotaland
Franklin Mint
L & N
Centra
CFCU Community
SF Police
Michigan Schools and Government
First Community
Dupont Community
Whitefish
Tropical Financial
Sharonview
Rockland
Credit Union of Colorado
Point Loma
Indiana Members
Unitus Community
Greylock
CoastHills
American Heritage
Community Financial
General Electric
Allegacy
Christian Community
3Rivers
TruWest
Evansville Teachers
Shell
AmeriCU
Congressional
Achieva
Seven Seventeen
$77,701,641
$75,468,900
$74,094,022
$73,672,075
$73,566,587
$73,398,753
$73,098,804
$72,786,322
$71,566,933
$71,552,536
$70,940,194
$70,863,434
$70,515,751
$70,041,544
$69,848,548
$69,404,107
$69,081,157
$68,158,685
$68,105,773
$66,862,507
$66,731,469
$66,723,612
$66,635,066
$66,361,820
$66,303,761
$65,734,377
$65,280,810
$65,055,001
$64,983,961
$64,692,092
$64,260,186
$64,071,611
$63,597,134
$63,514,807
$63,349,906
$63,154,303
$61,945,153
$61,788,563
$61,655,795
$61,055,172
$61,050,976
$60,537,934
$60,521,695
$60,398,099
$59,718,038
$59,356,764
359 332 311 409 337 499 395 172 2,279 522 325 533 222 403 670 274 501 389 395 167 387 441 436 416 254 427 230 400 147 416 311 359 292 313 351 326 408 119 371 221 587 493 454 193 304 528 $326,618,081
$456,107,951
$236,690,297
$103,493,551
$141,060,310
$175,910,116
$377,986,859
$330,787,097
$620,231,361
$303,041,763
$607,628,484
$262,120,570
$145,287,445
$232,886,583
$87,887,114
$201,772,643
$361,254,955
$306,850,625
$378,915,647
$298,900,804
$463,906,363
$358,037,523
$427,659,952
$546,493,728
$199,094,519
$489,558,989
$366,170,790
$242,378,843
$178,369,790
$377,460,922
$182,795,299
$450,309,133
$325,002,501
$377,686,858
$251,544,712
$389,361,064
$236,504,712
$431,872,718
$235,576,953
$254,449,034
$318,111,755
$133,493,289
$262,428,904
$193,004,421
$210,545,833
$278,922,164
$43,258,670
$25,082,711
$7,970,660
$0
$41,757,000
$42,853,850
$29,924,222
$10,375,075
$0
$33,698,397
$64,954,105
$34,873,860
$12,730,223
$26,817,724
$19,730,914
$85,148,996
$1,267,011
$19,000,100
$7,708,481
$0
$0
$8,735,307
$12,610,247
$0
$31,615,658
$766,500
$28,628,384
$28,006,095
$0
$18,813,005
$41,022,128
$22,043,459
$5,427,150
$104,454,144
$21,207,472
$2,376,325
$34,935,995
$7,736,250
$18,466,912
$25,174,341
$15,824,040
$21,858,057
$30,094,199
$10,458,815
$17,967,572
$4,782,085
$153,631,391
$182,905,167
$0
$0
$277,361,028
$238,416,823
$299,534,247
$97,853,454
$0
$266,156,176
$386,949,160
$346,172,812
$6,595,822
$293,333,577
$136,288,228
$402,533,443
$169,512,640
$152,701,004
$167,880,025
$0
$7,883,672
$550,980,469
$7,718,837
$0
$213,111,419
$16,892,449
$125,572,037
$130,791,430
$17,128,018
$27,877,584
$381,100,790
$433,136,000
$98,290,555
$814,337,725
$197,061,420
$0
$220,678,133
$84,145,793
$216,416,990
$24,452,462
$91,467,034
$99,599,789
$226,825,308
$0
$128,675,519
$0
The Top 300
209 CO
210 OK
211 IN
212 CA
213 OR
214 NE
215 MA
216 MI
217 CA
218 WI
219 MA
220 TX
221 WA
222 UT
223 MI
224 IL
225 CO
226 TX
227 WA
228 SD
229 TX
230 TX
231 WI
232 FL
233 MA
234 ND
235 IN
236 WA
237 SC
238 WI
239 MD
240 TN
241 TX
242 IA
243 WA
244 AL
245 VA
246 CO
247 MI
248 MN
249 MN
250 NY
251 CO
252 TX
253 HI
254 UT
Public Service Employees
$59,332,604
TTCU
$59,329,265
Indiana University
$59,289,784
USE
$59,184,988
Oregon First Community
$59,038,269
Liberty First
$58,958,297
St. Anne’s Of Fall River
$58,825,768
Lake Trust
$58,724,671
Southland
$58,217,100
Westby Co-op
$57,807,525
Harvard University Employees
$57,633,117
First Community
$57,630,730
School Employees Credit Union Of Washington$57,543,053
Deseret First
$57,309,310
Genisys
$57,258,715
Abbott Laboratories Employees $56,843,299
Westerra
$56,841,571
United Heritage
$56,234,140
TwinStar
$55,845,518
Black Hills
$55,822,502
Texans
$55,646,533
Austin Telco
$55,472,843
CitizensFirst
$55,402,813
Campus USA
$55,120,620
Align
$53,730,115
First Community
$53,484,329
Interra
$53,241,244
Solarity
$52,825,742
South Carolina
$52,490,175
Thrivent
$52,319,850
National Institutes of Health
$51,321,703
Knoxville TVA Employees
$50,308,079
Firstmark
$49,850,574
Community 1st
$49,588,942
Salal
$49,526,776
America’s First
$48,897,448
University of VA Community
$48,674,930
Aventa
$48,625,417
Educational Community
$48,600,216
Spire
$47,926,975
US
$47,844,530
Municipal
$47,676,222
Air Academy
$47,571,043
FirstLight
$47,105,653
Hawaiian Tel
$46,973,750
University First
$46,942,845
307 434 374 270 365 428 253 360 184 496 149 299 454 291 339 264 290 325 309 299 414 302 464 510 200 250 304 343 320 383 155 652 483 458 147 440 417 188 376 344 296 196 237 281 113 383 $151,232,065
$175,455,250
$325,449,975
$242,357,579
$216,885,022
$60,255,168
$411,534,745
$518,720,514
$155,312,491
$140,535,551
$208,930,399
$175,984,858
$109,427,602
$121,623,740
$342,415,381
$167,744,193
$385,641,645
$306,524,992
$126,008,908
$278,884,936
$226,447,273
$274,170,040
$317,284,176
$304,712,194
$215,484,586
$190,283,376
$251,706,830
$172,286,713
$353,486,774
$182,277,901
$162,514,635
$401,476,435
$295,187,687
$233,244,966
$100,058,570
$368,537,166
$93,405,345
$26,165,194
$184,513,706
$197,651,651
$295,324,159
$569,844,013
$119,841,134
$212,633,882
$184,750,572
$101,733,250
$33,151,543
$39,110,797
$9,848,821
$32,163,305
$25,487,614
$39,082,167
$22,548,731
$0
$32,806,150
$9,121,903
$12,411,988
$19,859,141
$0
$33,077,100
$4,961,244
$21,027,900
$13,363,906
$15,953,385
$53,234,157
$5,860,119
$10,111,373
$0
$15,209,564
$12,578,975
$16,421,180
$12,203,106
$2,592,405
$32,358,162
$11,386,475
$29,678,746
$24,366,115
$6,724,856
$0
$7,897,574
$26,931,381
$5,879,220
$19,930,342
$47,376,980
$16,081,018
$21,769,439
$0
$0
$32,266,380
$9,644,896
$12,632,250
$23,752,600
$208,014,828
$159,416,414
$15,178,881
$131,028,897
$246,838,676
$0
$320,267,399
$26,871,054
$122,538,658
$129,945,671
$130,584,269
$89,606,693
$0
$0
$44,395,617
$0
$155,776,974
$2,851,007
$215,526,198
$0
$5,614,590
$0
$141,698,497
$58,212,624
$177,402,430
$0
$0
$147,568,623
$115,095,563
$345,880,528
$329,013,773
$0
$0
$0
$214,288,514
$0
$0
$62,790,777
$103,646,566
$0
$0
$34,666,985
$0
$86,924,435
$0
$197,583,185
The Top 300
255 MI
256 VA
257 KS
258 AL
259 IA
260 OH
261 NC
262 ID
263 MI
264 LA
265 TX
266 NH
267 MO
268 CA
269 IL
270 TX
271 CA
272 NY
273 CA
274 WA
275 SD
276 CA
277 OR
278 CA
279 OR
280 MA
281 FL
282 TX
283 CA
284 WI
285 OR
286 CA
287 CT
288 IL
289 UT
290 VA
291 NM
292 WA
293 IL
294 NY
295 OR
296 CA
297 MA
298 CA
299 MA
300 IA
Dow Chemical Employees
Chartway
Heartland
Listerhill
Linn Area
KEMBA Financial
Self-Help
Potlatch No 1
Honor
Campus
Members Choice
Service
Missouri
America’s Christian
Selfreliance Ukrainian American
A+
Credit Union of Southern California
Island
Los Angeles
Global
Sioux Falls
Uncle
Oregon Community
Los Angeles Police
Selco Community
Hanscom
Pen Air
Texas Tech
San Francisco
Connexus
Rogue
Farmers Insurance Group
Connecticut State Employees
Consumers
Cyprus
BayPort
U.S. New Mexico
Sound
IH Mississippi Valley
USAlliance
OSU
Kern Schools
St. Mary’s
Educational Employees
Merrimack Valley
DuTrac Community
$46,841,849
$46,784,643
$46,642,458
$46,380,207
$45,811,658
$45,435,853
$45,387,550
$45,236,148
$44,736,439
$44,398,672
$44,040,238
$43,910,281
$43,882,158
$43,658,712
$43,514,080
$43,467,298
$43,384,820
$43,380,400
$43,315,131
$43,244,337
$43,181,120
$42,992,936
$42,979,727
$42,926,342
$42,850,482
$42,838,311
$42,823,561
$42,810,016
$42,754,072
$42,502,326
$42,427,874
$42,391,958
$42,247,717
$42,214,093
$42,201,252
$42,024,736
$41,893,524
$41,880,330
$41,663,905
$41,499,326
$41,464,394
$41,391,750
$41,019,587
$40,995,311
$40,959,914
$40,947,671
344 292 763 1,156 320 370 323 316 454 153 115 232 400 86 130 313 115 178 159 273 282 96 252 158 181 175 250 263 100 231 275 101 351 220 255 218 220 243 285 77 210 218 170 320 178 310 $357,380,430
$255,957,833
$92,080,510
$218,006,645
$82,726,888
$257,406,426
$264,422,836
$85,094,391
$208,602,217
$165,355,390
$145,725,007
$472,617,813
$39,387,966
$160,321,880
$186,930,525
$177,005,112
$221,388,476
$188,616,584
$253,684,981
$71,902,181
$13,741,879
$101,592,437
$204,692,780
$247,124,086
$251,011,555
$221,255,866
$174,122,659
$15,947,492
$292,537,245
$181,565,402
$196,191,939
$187,446,890
$254,362,756
$120,901,470
$125,530,762
$395,401,148
$159,910,043
$196,548,356
$163,103,899
$239,262,407
$176,089,396
$317,527,693
$261,115,665
$233,296,412
$146,690,231
$202,622,323
$322,700
$27,871,972
$14,405,121
$1,104,916
$16,154,814
$10,079,752
$0
$40,114,183
$19,765,600
$4,177,110
$0
$0
$35,091,452
$442,500
$0
$5,697,516
$5,324,575
$10,605,300
$1,317,100
$31,501,848
$42,819,560
$0
$0
$7,619,350
$0
$26,377,817
$7,624,285
$35,355,356
$0
$9,562,656
$17,173,821
$2,527,220
$0
$16,909,498
$13,968,525
$4,317,180
$10,955,749
$15,695,172
$25,433,221
$10,691,888
$25,320,668
$7,532,300
$15,011,072
$0
$10,930,381
$16,574,369
$24,418,932
$103,845,682
$0
$0
$0
$17,623,535
$0
$281,347,949
$235,397,684
$0
$0
$0
$396,979,103
$167,040,522
$0
$0
$57,628,028
$154,831,288
$290,000
$2,042,781
$0
$0
$0
$200,029,613
$0
$231,844,655
$28,994,079
$0
$0
$30,926,690
$3,485,436
$0
$0
$276,900,889
$0
$0
$0
$0
$322,893,726
$213,846,082
$227,336,691
$238,681,745
$77,533,409
$0
$168,916,413
$0
“An exceptionally challenging mortgage
industry demands THE RIGHT TOOLS.”
As fast as the mortgage industry is changing,
so are the tools to help us compete.
From an online mortgage application for members to the latest in business-tobusiness platforms, CU Members Mortgage is dedicated to providing credit unions
with technology for better lending programs, evolving to meet the market, and
ensuring compliance every step of the way.
The market doesn’t stand still. Neither do we.
Randy Shannon, Vice President Correspondent Lending
28 Years in Mortgage Lending
www.cumembers.com
800-607-3474 Extension 3225
NMLS #401285

Spirits Unleashed

Transcription

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