By Greg Spurgeon | SVP of Secondary Marketing
Technology is required to stay competitive in the mortgage business. Many credit unions use technology to support mortgage origination, but a smaller subset use technology for secondary marketing. This is due in part to cost, ongoing administration requirements, and general lack of awareness. However, utilizing technology for secondary marketing can improve:
• The daily management of mortgage products and pricing
• The loan officer product and member rate quoting
• The rate lock process
Product Pricing
Operational staff at many credit unions have a process for generating daily mortgage pricing. This involves multiple steps of copying investor pricing by product and pasting it in spreadsheets with complex formulas for applying margins. One mistake within the process can lead to a significant error in the pricing published to the loan officers for quoting.
Technology can streamline the process for generating daily pricing automatically. It can directly pull investor pricing throughout the day and apply predetermined margins the credit union is targeting. Rather than a long manual process (often 30 plus minutes) prone to errors, it can automatically be done by the system.
This automation of a daily process minimizes the risk of error and saves time.
Product & Rate Quoting
Loan officers at many credit unions still rely upon paper rate sheets and manual processes for conversations with members about mortgage products and associated pricing. This is also inefficient, prone to pricing errors, and can often seem like an awkward experience for the member.
Technology can streamline the loan officers process for quoting products and pricing available for a specific member’s scenario. It can quickly determine which products the member is eligible for, which ones they are not (and why), and the real-time pricing available. It will compare traditional conforming products available from Fannie Mae or Freddie Mac against unique portfolio products the credit union may offer and identify which is the best offering for the member.
This functionality can help a loan officer rapidly determine the best product available and quickly quote the member. It also helps establish controls so loan officers are quoting consistent pricing. With faster, more efficient and accurate product and pricing tools, the loan officer can provide the credit union member a more professional and seamless experience.
Rate Lock Process
The rate lock process at many credit unions is often manual, starting with an email request from the loan officer. The staff then manually processes each initial rate lock request (and lock update) throughout the process, using the paper rate sheets and a calculator to re-calculate. Multiple emails typically go back and forth between the loan officer and staff processing the lock.
Technology can automate the process for initial locks and change requests, leaving only exception locks for staff to calculate manually. It can integrate with the loan origination system so data can transfer back and forth, eliminating manual data entry. In addition, using technology to support the rate lock process makes historical data readily available for auditors to review.
Utilizing technology within your credit union’s mortgage secondary marketing operations provides multiple benefits to your mortgage origination business. If you’d like to learn more about the different technologies available and how to make them cost effective for your credit union, please send me an email at gspurgeon@truhome.com to set up a time to visit.