The 3 (or more) Things You Must Know About Mortgage Lending


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No single subject has been more in the news the past several years than mortgage lending. The root cause of the housing crisis and a major contributor to the great recession are two things you'll hear from most consumers should you mention the subject. And, while both are true, neither one of them are included in the three things you must know about mortgage lending. In this 2011 NAFCU Strategic Growth Conference presentation, Nizar Hashlamon, Vice President of Lending Solutions from Prime Alliance Solutions, Inc., and Executive Director for Prime Alliance Loan Servicing, explores the most important information in what is arguably the most powerful loan you can make for your members - a mortgage loan.

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The 3 (or more) Things You Must Know About Mortgage Lending

  1. 1. M a nyThe  Three  Things  You  Must  Know  About  Mortgage  Lending Presented  by  Nizar  Hashlamon,  Prime  Alliance  Solu2ons,  Inc.
  2. 2. Outline I. Quick Review & Look Back. II. Why Home Lending? Why Now? III. THREE THINGS you ought to know. IV. Where Will CUs Play?Copyright  ©  2011  Prime  Alliance  Solu?ons
  3. 3. What  Does  Ancient  History  Tell  Us? refinance We  became    Mortgage  Lenders <We  refinanced  more  mortgages  than  we  financed  homes.
  4. 4. A  Brief  History  of  CU  Mortgage   Lending Not  much   Unbridled   Dark happened Innova?on Times 1978 1994 1998 1999 2001 2007 2011 Refi   Housing   FCUs   Last  Refi Hangover  /   Prime  Alliance Bright DU   Born Bubble Future granted Boom  dot-­‐com Bursts CreatedLong-­‐term of  the boom   authority Century leads  to   innova?on
  5. 5. OriginaIons  and  Secondary  Mkt  Sales   Source:  Callahan’s  Peer  to  Peer  So2ware
  6. 6. In  Crisis,  Opportunity Two  to  Ten12.00% Shared   AspiraIon10.00% 8.00% The  2% Decade 6.00% 5.4% 4.00% 2.00% The   Subprime Crisis 0.00% 1996                                  2000                                    2004                                    2008                                    2012                                  2016 Source:  CU  Housing  RoundTable
  7. 7. A    Really  Brief  Synopsis   of  the  Past Three  Years
  8. 8. Members  flocked  to  their  CUs...for  refinance
  9. 9. The  General  Public  Discovered  CUs...for  Refinance
  10. 10. CU  Balance  Sheet 2010 ("# !"# ######)*+,-.#)/*,#01/23# Credit Cards Loans $36.05 %&"# ######4+/5#63./.+#01/23# Real Estate Loans $310.70 $$"# Auto######78.1#01/23# Loans $164.27 Other Loans 9.:+*#01/23# $54.81
  11. 11. CU  Mortgage  Assets  Out-­‐Perform!
  12. 12. Through  Real  Estate  Lending... ...we  become  relevant  in  our  member’s  lives
  13. 13. Our  Only  OpIon:  Earn  Our  Way  Out!
  14. 14. Through  Real  Estate  Lending... ...we  enable  our  CU  to  thrive
  15. 15. Three  Stages  of  Credit  Union  Lending  EvoluIon CUs  Refinanced   CUs  Refinanced Mortgages  and   CUs  Become  Home   We  made  Mortgages Financed  Homes Lenders1978 1989 1999 2007 2009 2020
  16. 16. Why  Home  Lending?  Why  Now? Five  Major  Shi_s
  17. 17. #1  Member  Demographics
  18. 18. #2  Consumers  Seek  Trusted  Lenders
  19. 19. # 3 Homes ARE very affordable
  20. 20. #4  Mortgage  Brokers  Out  -­‐  Retail  In
  21. 21. #5  We  Need  Revenue,  Revenue,  Revenue
  22. 22. Everything  you  always  wanted  to  know  about   mortgage  lending... ...or  THREE  THINGS  you  ought  to  know.
  23. 23. Mortgages  are  More  Flexible     Trust Purpose Service Products Term1 RelaIonship Investment
  24. 24. Mortgages  are  More  VersaIle Two  assets  in  one2 and  many  more!
  25. 25. Mortgages  are  More  AeracIve  What  beeer  service?3 What  beeer  investment?  
  26. 26. The  Market  is  different  because...
  27. 27. This  isn’t  your  father’s   mortgage  market. The  Market’s  Changed...and  Changing.   We  Must  Change.
  28. 28. The  Market  is  different  because... ...GSE  reform  is  inevitable.
  29. 29. Everything  OLD  is  NEW   Again!
  30. 30. Where  Will  CUs  Play?
  31. 31. Understand,  Embrace  and  Live...Geing  Organized 12-­‐18  months Finance 1-­‐3  months Shop  &  Buy 3-­‐6  months Enjoy  Your  Home 3-­‐30  Years
  32. 32. The  HOME  Event:   Geing  Organized
  33. 33. The  HOME  Event:   Geing  OrganizedWhat  Members  Do:
  34. 34. The  HOME  Event:   Geing  Organized What  Members  Do:Get  Budgets/Finances  in  OrderResearch:    Neighborhoods,  Schools,  Home  Values  and  Home  TypesLearn:    About  buying,  financing  and  owning  a  home
  35. 35. The  HOME  Event:   Geing  Organized What  Members  Do:Get  Budgets/Finances  in  OrderResearch:    Neighborhoods,  Schools,  Home  Values  and  Home  TypesLearn:    About  buying,  financing  and  owning  a  home What  We  Should  Do:
  36. 36. The  HOME  Event:   Geing  Organized What  Members  Do:Get  Budgets/Finances  in  OrderResearch:    Neighborhoods,  Schools,  Home  Values  and  Home  TypesLearn:    About  buying,  financing  and  owning  a  home What  We  Should  Do: Educate:  Home  Buying/Owning  Seminars  and  Web-­‐based  tools Help  with  budgeIng  and  Financing AdverIse...AdverIse...AdverIse
  37. 37. The  HOME  Event:   Shopping  &  Buying
  38. 38. The  HOME  Event:   Shopping  &  BuyingWhat  Members  Do:
  39. 39. The  HOME  Event:   Shopping  &  BuyingWhat  Members  Do:Search  Online  for  HomesMeet  and  Pair-­‐up  with  Realtors
  40. 40. The  HOME  Event:   Shopping  &  BuyingWhat  Members  Do:Search  Online  for  HomesMeet  and  Pair-­‐up  with  Realtors What  We  Should  Do:
  41. 41. The  HOME  Event:   Shopping  &  BuyingWhat  Members  Do:Search  Online  for  HomesMeet  and  Pair-­‐up  with  Realtors What  We  Should  Do: Provide  Online  Tools  to  help  members  shop Form  Mutually  Beneficial  Realtor  RelaIonships
  42. 42. The  HOME  Event:   Financing
  43. 43. The  HOME  Event:   FinancingWhat  Members  Do:
  44. 44. The  HOME  Event:   FinancingWhat  Members  Do:Choose  a  LenderChoose  Their  Financing  OpIonsStress/Anxiety/Freak  Out!!
  45. 45. The  HOME  Event:   FinancingWhat  Members  Do:Choose  a  LenderChoose  Their  Financing  OpIonsStress/Anxiety/Freak  Out!! What  We  Should  Do:
  46. 46. The  HOME  Event:   FinancingWhat  Members  Do:Choose  a  LenderChoose  Their  Financing  OpIonsStress/Anxiety/Freak  Out!! What  We  Should  Do: Fill  the  White  Space:  Products,  Market  Niches Campaign  for  Business AdverIse...AdverIse...AdverIse
  47. 47. The  HOME  Event:   Living  the  American  Dream
  48. 48. The  HOME  Event:   Living  the  American  DreamWhat  Members  Do:
  49. 49. The  HOME  Event:   Living  the  American  DreamWhat  Members  Do:Redecorate Purchase,  Purchase,  PurchaseRemodel Grow  Their  FamiliesRe-­‐landscape Create  Financial  Plans
  50. 50. The  HOME  Event:   Living  the  American  DreamWhat  Members  Do:Redecorate Purchase,  Purchase,  PurchaseRemodel Grow  Their  FamiliesRe-­‐landscape Create  Financial  Plans What  We  Should  Do:
  51. 51. The  HOME  Event:   Living  the  American  Dream What  Members  Do: Redecorate Purchase,  Purchase,  Purchase Remodel Grow  Their  Families Re-­‐landscape Create  Financial  Plans What  We  Should  Do: Fill  the  Financial  Service  NeedsConsistent  MarkeIng  Reminders Help  Create  Financial  Plans PredicIve  AnalyIcs Closely  Monitor  Servicing  Pormolios
  52. 52. Mortgage Lending IS a core credit union strategyCopyright  ©  2011  Prime  Alliance  Solu?ons
  53. 53. The  Take  Aways Know  Your  History There’s  Three   Things  You  Ought   to  know  about   Commit  to   Mortgage  Lending the  Big  Goal Home  Lending  is   THE  Strategy   for  CUs  [  We  Thrive  As  We  Become  Home  Lenders  ]  
  54. 54. Thank you! Nizar Hashlamon Prime Alliance SolutionsCopyright  ©  2011  Prime  Alliance  Solu?ons