ACUMA January 2016 Pipeline

JANUARY • 2016

By Tom Burton n Page 38

RECR

UITIN

G

RETIREMENT

Celebrating 20 Years

INSIDE: Moody’s Mark Zandi Assesses the Economy n Page 30New Features: Names in the News n Pages 5, 8

THE BRAIN DRAIN BATTLING THE CLOCK

PIPELINEACUMA

MAGAZINE

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January 2016 - PIPELINE 1

TABLE OF CONTENTS

ACUMA Pipeline is a publication of the American Credit Union Mortgage As-sociation, PO Box 400955, Las Vegas, NV 89140.

Mark WilburnTruity Credit Union

Chairman

Pam DavisDelta Community CU

Vice Chairman

Barry StricklinTower FCUTreasurer

Tim MislanskyWright-Patt Credit Union

Secretary

John ReedMaine Savings FCU

Director

Michael Patterson,Financial Partners

Credit Union Director

Bob McKayAnheuser-Busch ECU

Director

Bob DorsaPresident

The information and opinions pre-sented 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 2016 by ACUMA. All rights reserved.Printed in the USA

PIPELINEACUMA

MAGAZINE

2 Columns2 President’s Column:

Topics of Interest to ACUMA Members and Mortgage Lenders By Bob Dorsa

4 A Message from the Board: Comments about ACUMA’s Strategic Direction By Mark Wilburn, Board Chairman

5 Industry Successes: Noteworthy benchmarks of member organizations

6 Compliance Challenges: A Look at Pressing Issues Affecting Credit Unions By Kris Kully

8 Making a Difference: Honors, Awards and Recognitions for Individuals and Organizations

10 Regulation and Legislation: An In-Depth Look at Issues Affecting Credit Unions at the Federal Level By John J. McKechnie

56 The Last Word: A Look at Big-Picture Issues Facing Credit Unions By Tracy Ashfield

12 In the Pipeline: Insights and Observations on CU Mortgage Lending12 Managing Risk: An Alternative to Servicing Your

Loan Portfolio – By David J. Miller Jr.

14 Are You Prepared for the Spring Home-Purchase Market? It’s Not Too Soon to Make Product and Services Decisions to Help Members – By John Castiello,

18 Job Market Weakens but Home Prices Rise in ‘Energy Patch’ States – By Ralph DeFranco, Ph.D

24 The Road to High Performance Credit Union Mortgage Lending Six Key Indicators Can Help Show You the Way

By Nizar Hashlamon and Dan Green

30 U.S. Macro Outlook 2016: The Economy Is in GearBy Mark Zandi

38 THE BRAIN DRAIN: BATTLING THE CLOCKBy Tom Burton

47 The Top 300: Opportunity Comes with Challenges in 2016

PIPELINE - January 20162

A LOOK BACK, A LOOK AHEAD

It was 20 years ago todaySgt. Pepper taught the band to play.

They’ve been going in and out of stylebut they’re guaranteed to raise a smile.

Lennon/McCartney Sgt. Pepper’s Lonely Hearts Club Band

It was just about 20 years ago today that a handful of credit union folks, at-tending a conference in Washington, D.C., gathered to lay the foundation for a new organization, one dedicated to mortgage lending.

From those discussions rose the American Credit Union Mortgage Asso-ciation, or as we know it, ACUMA. And while we don’t go “in and out of style” like the Beatles’ orchestra, we do make some pretty good music together—and that’s certainly something to smile about.

The annual ACUMA Conference will return to Washington, D.C. this fall (Sept. 19-21) not so much to recall those early days (although we’ll mark our anniversary with some special events) but to take stock of the chang-es and growth ACUMA has helped to bring about in the real estate-lending world of credit unions.

From our small beginnings ACUMA has grown to become a player in the mortgage lending industry, attracting nearly 400 attendees for our annual conference in Las Vegas for last fall.

And interest in mortgage lending continues to grow in credit unions, where the market share of new-loan originations has grown considerably and hovers around 10% of the nation’s market share—yes, 10%. In just the first half of 2015, credit unions in the United States granted 329,057 first-mortgage loans to help members achieve the American dream of home ownership.

THE GAME HAS CHANGEDSo the game has changed. More

credit unions are making home loans. More of them are using ACUMA to share ideas, learn from industry leaders and gain knowledge of the industry.

So, we know that we’ve “taught the band to play,” what’s next?

ACUMA feels strongly that we need to join together to advocate for credit unions. I’ve talked frequently about the credit union difference and how we have no other purpose but to serve our members. There are no stockholders to satisfy, no profit to be passed along. That difference can resonate with all of our members. Whether they are first-time buyers (increasingly our “millennial” generation) or looking for another home to satisfy their changing needs, credit unions do a better job in assisting them.

We are community-based, so we know the local economy; we can be flexible in the kinds of loans we offer (and they qualify for), and we have their best interests in mind.

That’s the story we need to tell. We must advocate for the credit union dif-ference.

SHARING ACUMA’S MESSAGETaking the message to members

has been important, but we must now go beyond that—taking it “to the streets,” of D.C., that is, to our nation’s policymakers.

A big part of advocating for credit union mortgage lending comes bun-dled up with policy—the rules and reg-ulations. So symbolically, Washington becomes a natural choice for marking our 20th year. It’s home to so many of

the policymakers (both regulators and legislators) who set the boundaries for our business. There’s no better place to engage them and make a case for credit unions.

So, put Sept. 19-21, 2016 on your calendars. Check out our program on the acuma.org website and talk to your team about attending. The substance for this conference’s content is bigger than mortgage lending; it touches all of your operations, including human re-sources, marketing and finance. Here’s your chance to engage your executive leadership team and show them what ACUMA is about, what it’s become.

We encourage you to join with your peers in our nation’s capital to mark a significant anniversary for the bigger picture of CU mortgage lending and to learn more about engaging and advo-cating for the credit union difference.

Bob Dorsa has been ACUMA’s presi-dent for all 20 years of its existence. He has been instrumental in building the organization into a solid national player for credit union mortgage lending.

President’s Column Topics of Interest to ACUMA Members and Mortgage LendersBy Bob Dorsa

ACUMA feels strongly that

we need to join together to advocate for credit unions.

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THE EVOLVING ROLE OF ACUMA

At last fall’s ACUMA conference it struck me how far the organization has come. The conversations reflect the growth and depth. It’s no longer “How many loans?” or “What’s your volume?” Instead the talk moves into sub-servic-ing, the secondary market, portfolios and risk management. It’s about varied product offerings, the CFPB and TRID.

Yes, times have changed, and ACUMA has evolved into an impor-tant player in mortgage lending for credit unions:

Our group not only provides a fo-rum for the exchange of ideas, it ex-poses its members to the movers and shakers within the industry as well as the regulators and policymakers on the federal level.

We reach out and establish ties with like-minded groups, such as the Nation-al Association of Realtors, who work lo-cally to make home ownership a reality for more members.

Our national conference brings doz-ens of top speakers to share ideas on the big issues and best practices, and our workshops zero in on your busi-ness challenges with ideas you can take back to your shop.

ACUMA has worked with NCUA to create education and training for small credit unions on realistic mortgage strategies.

Indispensable? Well, here’s what one recent workshop attendee, Casey Filburn of Advantis Credit Union in Portland, Oregon, put it: “I have learned that being an active member of ACUMA is a tool to improve my organi-zation that is just as important as any other tool I use.”

As incoming chairman, I want cred-it unions to see all of the ways ACUMA is making a difference for mortgage lending. We’re a growing organization with members from across the United States and credit union mortgage lend-

ers ranging in size from the very largest to smaller operations.

Together, we are making a differ-ence. As credit union market share for mortgage loans continues to move into double figures, it is becoming increas-ingly important to stay ahead of the curve. ACUMA provides you with that edge, allowing you to compete in the marketplace and serve your members with outstanding value.

Mark Wilburn is the incoming chair-man of the ACUMA Board of Directors. He serves as senior vice president and chief lending officer at Truity Credit Union in Bartlesville, Oklahoma. Previ-ously, Wilburn worked at Affinity Plus Federal Credit Union in St. Paul, Min-nesota, and Point Loma Federal Credit Union in San Diego. He received the 2015 Phil Greer Lifetime Achievement Award from the CUNA Lending Council.

A couple of decades ago when a handful of credit union leaders formed an organization for mortgage lenders, the idea was to network—share ideas for making

homes loans—to help credit unions build programs to help members become home owners.

A Message from the BoardComments about ACUMA’s Strategic DirectionBy Mark Wilburn, Board Chairman

As one recent workshop attendee

put it: ‘I have learned that being an active member of ACUMA is a tool

to improve my organization that is just as

important as any other tool I use.’

Our group not only provides a forum for the exchange

of ideas, it exposes its members to the movers and

shakers within the industry as well as the regulators and

policymakers on the federal level.


INDUSTRY SUCCESSES

This issue marks the debut of our new “successes” column for member organizations. We will continue to pub-lish news of interest in coming issues of The Pipeline. For information on how to submit news, please check the italicized paragraph at the end of this article. (We also have begun a separate column for honors, awards and recognitions.)

lCredit unions in the Waterloo-Cedar

Falls, Iowa area lead the credit union in-dustry in mortgage loan origination mar-ket share, capturing 44 percent of the lo-cal market in 2014, according to Callahan & Associates’ analysis of Home Mortgage Disclosure Act. Veridian Credit Union led the market with 24.35 percent mar-ket share, followed by University of Iowa Community Credit Union with 14.6 per-cent, notes Chris McGovern, Veridian’s mortgage lending manager.

lThe Mortgage Services Department

at Fairwinds Credit Union has cel-ebrated a record-breaking year, reports Christine Busheme, vice president of mortgage services at the Central Flori-da-based CU. Fairwinds was recognized at the Credit Union World Conference, Busheme says, for results including its largest mortgage disbursement month of record; a 100 percent increase (year over year) in disbursement volume; a doubling in purchase percentage of its pipeline; 25 percent annualized port-folio growth and $750 million in con-sumer real estate property paper under management. Busheme also reports that Fairwinds’ first loan under the new TRID rules made it from application to closing queue submission in nine days.

lIn November, Five Star Credit

Union completed the purchase of Farm-ers State Bank of Lumpkin, Georgia, and converted its customers to mem-

bers of the Dothan, Alabama-based credit union. In 2014, Five Star bought Flint River National Bank of Camilla, Georgia, and also converted its custom-ers to CU members. Aaron W. Craig, Di-rector of Mortgages & Collections, says Five Star is becoming known as the credit union in southeast Alabama that is buying up banks.

lCoVantage Credit Union, based in

Antigo, Wisconsin, was awarded a $2 million grant from the U.S. Treasury’s Community Development Financial In-stitution Fund to help people of modest means in rural and low-income com-munities buy affordable homes. The grant was used to create a down pay-ment assistance program to which the credit union contributed another $13 million, CoVantage says. The program also provides funding to make needed repairs to homes that are under distress or creating unsafe living environments.

The program assists individuals and families that may not have quali-fied for a mortgage previously, opening a chance for home ownership to hun-dreds. Under the program, homebuyers have an opportunity to borrow up to 90% of the purchase price or appraised value, whichever is less, with a low-rate mortgage (and without requiring pri-vate mortgage insurance).

The buyer can also obtain a home improvement loan in the form of a sec-ond mortgage to make needed home repairs. There is no payment due and no interest charged on the second mortgage unless the first mortgage is refinanced, the home is no longer the primary residence or the home is sold.

lCUMAnet, the East Coast mortgage

CUSO, has launched an Affordable Housing Platform for low- to moderate-income mortgage borrowers. CUMAnet notes that the innovative and compre-hensive platform will make home own-ership more accessible to underserved populations.

Launched as a partnership of CUM-Anet, New Jersey Community Capital (NJCC) and Affinity, the platform has gained local and national attention for its “unique and responsible approach to improving the borrowing experience for this critical demographic group,” CUMAnet reported.

CUMAnet also has added NJCC to its ownership group, its first expansion in more than a decade. NJCC joins Af-finity, Greater Alliance Federal Credit Union and Credit Union of New Jer-sey in the group, which is celebrating its 20th anniversary.

lAnnual awards for excellence in

mortgage lending were announced in November 2015 at the 11th annual myCUmortgage Partner Conference. Credit unions received awards in a number of categories from myCUmort-gage, a CUSO serving nearly 200 credit unions and owned by Dayton, Ohio-based Wright-Patt Credit Union.

For most loans originated, winners are Rogue Credit Union of Medford, Oregon (large credit unions), Hopewell Federal Credit Union of Heath, Ohio (mid-size), and Topmark Federal Cred-it Union of Lima, Ohio (small).

Purchase lender awards go to CSE Federal Credit Union of Lake Charles, Louisiana (large credit unions), Lake-view Federal Credit Union of Ashtabu-la, Ohio (mid-size) and Dynamic Feder-al Credit Union of Celina, Ohio (small).

TELL US ABOUT YOUR SUCCESSWe publish news pertaining to suc-

cesses achieved by our member organi-zations (not individuals), including in-creased market share and loan volume. Send your success stories to [email protected] and include what (be specif-ic), when and where. Deadlines are May 15 for the July issue and November 15 for the January issue.

Industry SuccessesNoteworthy benchmarks of member organizations


HOME MORTGAGE DISCLOSURE ACT

In short, credit unions that report HMDA data will have to report a lot more data in the coming years. (The rule’s collection requirements begin in January 2018.) Some impacts of the rule are obvious, while others are hard to predict.

SIGNIFICANT CHANGES AHEADThe rule’s new data mandates will

obviously require significant and costly systems changes. The rule requires 25 new data points, and mandates the re-porting of others that were previously optional. Although we just implement-ed the new Loan Estimate and Closing Disclosures (TRID), we must now revisit our application and origination process-es and systems again, and start another conversation with relevant vendors.

Recently, CFPB Director Richard Cordray asserted that even with the lead time for TRID implementation, vendors were not prepared, causing delays and risking compliance violations. The two years until the HMDA rule kicks in will fly by, and this time regulators may have even higher expectations for readiness and lower tolerance for errors.

While the up-front burdens of sys-tems and process changes are obvious, it’s harder to predict what the govern-

ment will do with all the additional data. HMDA data are used not only by regulators for compliance purposes, but also by the public—including research-ers, community groups and lawyers. The new data fields will include a mem-ber’s age, credit score, debt-to-income (DTI) ratio, address and home value.

PRIVACY CONCERNS ABOUNDThe CFPB has not yet decided how

much of that sensitive information will be made public. Wily data crunchers could likely discover very personal in-formation about individual homeown-ers, if all or even part of that additional data is disclosed. Credit unions have developed trusting relationships with their members and take the protection of their privacy seriously. The CFPB must carefully weigh the public’s need for aggregated information about mort-gage lending against each individual homeowner’s right to privacy.

It’s also difficult to predict how the government will set fair lending pri-orities. The government has historically recognized that HMDA data is insuffi-cient to prove discrimination, since it does not reflect all the legitimate fac-tors that go into an underwriting or pricing decision.

Generally, agencies have used HMDA data as an initial screening tool, to target certain lenders for further scrutiny. That scrutiny is often a pain-ful, lengthy and expensive process that can threaten a lender’s resources and reputation.

FAIR LENDING QUESTIONSSince the new data will include cred-

it score, ratios, and the loan’s rates and fees, plus denial reasons (the reporting of which will become mandatory), the agencies could refine their screening process and target fewer lenders for that onerous additional scrutiny. However, those agencies could instead feel em-boldened by the additional data to pur-sue even more aggressive investigations.

There are many more details to absorb about the upcoming HMDA reporting changes—like the manda-tory reporting of certain preapproval requests. Unfortunately, several sig-nificant details, including which data will be disclosed and how the CFPB’s planned Web-based data submission tool will work, are still unknown.

I predict that any piecemeal release of needed guidance, and any resulting course corrections, will cause us many headaches in the years to come.

Kris Kully is a partner at K&L Gates LLP. Her legal practice focuses on fed-eral and state regulatory compliance issues affecting providers of consumer financial services. She advises clients on compliance with licensing, consumer protection and other practice require-ments including residential and com-mercial mortgage lenders.

After years in the shadows, the Home Mortgage Disclosure Act (HMDA) is back. The Consumer Financial Protection Bureau (CFPB) issued a final rule

(www.consumerfinance.gov/regulatory-implementation/hmda/)in October addressing every aspect of collecting and reporting residential mortgage loan data—including who, what, when and how.

Compliance Challenges A Look at Pressing Issues Affecting Credit UnionsBy Kris Kully

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MAKING A DIFFERENCE

This issue marks the debut of our new “Making a Difference” column for people and organizations within our industry space. We will continue to publish this column in coming issues of The Pipeline. For information on how to submit news, please check the italicized paragraph at the end of this article. (The Pipeline will also carry news of “industry successes” in a separate column.)

lThe Fort Collins Board of Realtors

awarded its 2015 Af-filiate of the Year honor to Dave Armstrong, mortgage loan origina-tor at Boulder-based El-evations Credit Union. He was honored for in-tegrity, commitment to

excellence, professionalism and dedica-tion to the Northern Colorado real estate community.

lAlissa Sykes, vice president of lend-

ing at Sunmark Federal Credit Union in Albany, New York, has been recognized as a “Woman to Watch” by the Credit Union Times.

Sykes was cited for her “dedication and leadership in exploring the possibilities that have helped Sunmark FCU develop innovative solutions that deliver on local consumers’ lending needs.”

In addition, she was names a “CU Rock Star” by the Credit Union Na-tional Association (CUNA), which noted that she “has successfully—and quickly—wound her way into what she describes as a position that perfectly blends her personal desires and profes-sional skills.”

“I love to help people,” Sykes tells CUNA. “And now I’m able to focus on my passion—housing—as well. We never tell members ‘no,’ on a mortgage. We might tell them ‘not now.’ ”

She founded the Albany-based Cred-it Union Real Estate Network and serves on the advisory board of PHH Mortgage and Arch Mortgage Insurance. Sykes is also a member of the Rensselaer County Housing Resources Board.

lLori Norby, branch

manager and mortgage loan officer in the CU Mortgage Direct office in Madison, South Da-kota, has been recog-nized as a top mortgage originator by the state’s

Housing Development Authority—the eighth time she has been so honored. Lori excels at promoting first-time buy-er mortgage programs and home buy-ing in her community, says CU Mort-gage Direct COO David Bednar.

lAnnual awards for excellence in

mortgage lending were announced in November 2015 at the 11th annual myCUmortgage Partner Conference. Credit unions received awards in a number of categories from myCUmort-gage, a CUSO serving nearly 200 credit unions and owned by Dayton, Ohio-based Wright-Patt Credit Union.

Honored as origina-tor of the year are Tim-othy Muffley, DESCO Federal Credit Union, Portsmouth, Ohio (large credit unions); Wendy Bussa, Hopewell Fed-eral Credit Union, Heath, Ohio (mid-size); and Michelle Boughan, Topmark Federal Credit Union, Lima, Ohio

lJohn Murphy, vice

president of mortgage lending at Consum-ers Credit Union in Oshtemo, Michigan, has earned the Certi-fied Mortgage Banker designation from the Mortgage Bankers Association. Mur-phy was one of 17 individuals honored for receiving the CMB designation, the highest professional honor in the real estate finance industry, at the MBA’s an-nual conference in October.

lDeb Flettre, regional mortgage loan

sales manager for Royal Credit Union, has been named Chamber Member of the Year by the Hudson, Wisconsin,

Chamber of Commerce. The award recognized a member who has donat-ed their time to cham-ber events. “I am fortu-nate to be able to work for an organization that supports giving back to

the community and allows me to put in the time and effort,” says Flettre.

TELL US ABOUT YOUR NEWSWe publish news of credit union real-

estate industry honors, awards and recog-nitions of individuals and organizations. We also publish news of housing-related community recognitions, such as Habitat for Humanity projects and National Asso-ciation or Realtors cooperative ventures. Send your news to [email protected] and include who, what (be specific), when, where and, if desired, a head-and shoulders photo (150 dpi), identifying the person being honored (name, title, orga-nization) on a piece of paper taped to the back of the photo. Deadlines are May 15 for the July issue and November 15 for the January issue.

Making a DifferenceHonors, Awards and Recognitions for Individuals and Organizations

Armstrong

Norby

Sykes

Muffley

Murphy

Flettre

2016 ACUMA WorkshopEach year, ACUMA offers challenging workshops on mortgage-lending focused top-ics. These two-day sessions offer a chance for credit union folks to dig a bit more deeply into today’s challenges and opportunities. n These meetings provide time for listening, asking questions and networking with like-minded professionals and industry experts. n ACUMA loves hosting these sessions, and attendees rave about the value they bring. This year, the two locations for the program also provide a bit of Southwestern hospitality. n Don’t wait—space is limited. Registration for mem-bers costs just $525 and ACUMA provides breakfast and lunch both days, as well as a hosted reception the first evening.

Tempe, ArizonaMay 18-19

Mission Palms Hotel

San Antonio, TexasJune 21-22

Westin Riverwalk Hotel

Check the Event Calendar page on the www.acuma.org website for registration information and detailed listings for workshop topics.


CREDIT UNION ADVOCACY: FOR NOW, ALL EYES ON NCUA

While Republicans have majorities in both chambers, they are unable to pass legislation that would be signed into law by President Obama, render-ing all but the most innocuous propos-als pointless to pursue.

Attempts at housing finance reform in this Congress have been anything but innocuous, but still bear close mon-itoring by the credit union mortgage lending community.

REGULATORY RELIEF LEGISLATIONSenate Banking Committee Chair-

man Richard Shelby (R-Ala.) has pro-duced regulatory relief legislation aimed at paring back mortgage-related portions of Dodd-Frank. The bill, passed by the committee in July, re-forms Qualified Mortgages (QM) and mortgage servicing assets. In addi-tion, the measure requires the Federal Housing Finance Agency to shelve a proposed change in FHLB member-ship requirements pending the results of a GAO study, and would give credit unions parity with banks in the Fed-eral Home Loan Bank Act definition of “community financial institutions.”

The Shelby bill also contains a num-ber of provisions that would set the stage for larger GSE reform.

Language in the bill bars Fannie Mae and Freddie Mac from using fu-ture G-fee income from increasing their contributions to the Housing

Trust Fund. Fannie and Freddie would be required to create a risk-sharing ar-rangement with private investors, and the Treasury would be prohibited from selling its shares in Fannie and Freddie until authorized by Congress.

This reg relief legislation was ap-proved by the Senate Banking Commit-tee on a party-line vote, and is unlikely to become law unless it is attached to a larger bill (possibly a spending bill that would keep the government run-ning) sometime at the end of the year. Stay tuned—there may be an opportu-nity for credit unions to weigh in with grassroots support for the most helpful provisions.

NCUA CONSIDERS RULE CHANGESJust because Congress is not pass-

ing bills that will affect credit unions doesn’t mean that all is quiet on the federal front. NCUA is in the process of approving an ambitious and far-reach-ing slate of rule changes that will grant significant new flexibility for credit unions in the areas of business lending, field of membership and capital.

Here’s a laundry list of regulatory relief items NCUA is working on:

A proposed Field of Membership rule was approved unanimously in November. This update of several im-portant definitions and rules of the road, including community charter TIP (Trade, Industry or Profession) and what constitutes a service facility, will provide credit unions with significant flexibility in determining how to reach the consumer marketplace.

Supplemental capital rulemaking is expected to been taken up by the board in the next few months.

The final Member Business Lend-ing regulation, which updates the way in which credit unions make loans to members for business purposes, should be voted upon in February 2016.

What do these regulations have in common? First, they are all designed at removing burdens, or modernizing the regulatory framework overseeing credit unions. Second, and perhaps more sig-nificantly, they are guaranteed to gener-ate a strong political pushback from the banking industry.

Banks responded in an overwhelm-ing and unprecedented way during the comment period for the MBL rule this summer; 93% of the more than 3,000

Cynics like to say that Congress is dysfunctional, gridlocked, and just plain can’t get anything done. n You know what? They’re right. Or at least partially right.

Regulation and LegislationAn In-Depth Look at Issues Affecting Credit Unions at the Federal LevelBy John J. McKechnie

NCUA regulatory relief efforts are guaranteed to

generate a strong political pushback from the banking

industry.


CREDIT UNION ADVOCACY: FOR NOW, ALL EYES ON NCUA

letters received on the rewrite were from bankers or bank trades, and all of those expressed strong opposition.

And the FOM proposal is encoun-tering the same levels of bank opposi-tion. Proof? The day before the NCUA Board voted on the rule, the ABA wrote Chairman Matz attacking the yet-un-seen regulation, and cc’d key congres-sional leaders. Expect a well-orches-trated, high-decibel banker campaign against this in the coming months.

The same can be said for Supple-mental Capital rulemaking when that process commences.

BANKS SEEK TO THWART NCUAThe common thread here is obvious.

Bank grassroots are shifting into high-gear in an attempt to block any NCUA efforts to streamline credit union ser-vice offerings. On Capitol Hill, and now

in the regulatory arena, the bank lobby has inserted itself into every credit union policy debate, with an unfortu-nate degree of success. Lawmakers on both sides of the aisle frequently an-swer credit union requests for regula-tory relief by asking, “What will the bankers say?” Now, those same bankers are attempting to intimidate NCUA, and are counting on being able to drown out credit union voices in the process.

Credit unions have an opportuni-ty—no, a responsibility—to respond.

Grassroots political activism has been the hallmark of the credit union move-ment’s advocacy efforts, but the bank-ers appear energized. They are mount-ing an all-out effort to define credit unions, and the important regulatory reform items under consideration by NCUA are the latest battleground.

The credit union trades are gear-ing up for a grassroots campaign, and ACUMA members should step up and do our part to make sure credit unions, not banks, are the ones deciding how they serve their members.

John J. McKechnie is a partner at To-tal Spectrum, a Washington, D.C.-based team of companies providing strategic counsel and effective plan implemen-tation using advocacy, research, com-munications, and political engagement. You can reach him at (202) 544-9601 or [email protected].

The bank lobby has inserted itself into every credit union policy debate, with

an unfortunate degree of success.


IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING

Many credit unions today wrestle with enterprise risk management, focus-ing a considerable amount of time and resources on managing operational risk, balancing it with the delivery of excep-tional member service, while still being profitable.

If those three objectives are high on your to-do list, you might consider engag-ing a third party to handle the heavy lift-ing associated with servicing your loan portfolio. They can assist you in achiev-ing those objectives. So, it might prove worthwhile to invest some time looking into a partnership with a subservicer to see how they can help you.

The subservicing industry has grown from a small, relatively select group of users to a widely accepted form of servicing for a broad cross-section of financial services participants. Histori-cally, credit unions have been holders of the mortgage servicing right (MSR) with some retaining the MSR when they sell their loans to Fannie Mae, Freddie Mac or Ginnie Mae.

Over the last few years, we have seen dramatic shifts in this business with many credit unions engaging in second-

ary marketing activities. As a result, sub-servicing has become an accepted form of managing loan servicing activity and has become an alternative to in-house servicing operations.

WHAT IS SUBSERVICING?Subservicing is the outsourcing of

traditional administrative loan servicing activities to a third party for a fee. The portfolio can be serviced on a private la-bel basis with the servicing branded to provide a high-quality, consistent mem-ber experience.

Subservicers handle all of the tradi-tional servicing activities, from the loan closing through payoff, foreclosure or sale of servicing. They manage the core servicing activities including member service, default administration, account-ing and investor reporting, and integra-tion with your in-house systems. And, of course, they will manage compliance and regulatory issues on your behalf.

The subservicer typically also pro-vides access to loan data, delivery of indus-try standard and customized reports and support of management reporting needs. Perhaps most importantly, the subservicer will provide 24/7 member support and be able to measure and deliver the results through call statistics, turnaround times, performance measures, and high-quality contacts with the member.

In sum, while you have entrusted the daily operational activity and the responsibility of servicing performance to a third party, you continue to own the servicing rights and the member re-lationship while retaining the rewards and benefits associated with the servic-ing asset.

Despite the fact that you have out-sourced the servicing asset, you are still obligated for the performance of the

servicing activities. In order to admin-ister your responsibility, you will need to develop a strong oversight program to assure that the servicing is being per-formed in accordance with all applicable requirements, as well as in accordance with your business strategy.

BENEFITS OF SUBSERVICINGThere are numerous reasons to con-

sider subservicing as an alternative to an in-house servicing operation. But let’s start with perhaps the most challenging consideration today—compliance.

In today’s environment, the com-pliance and regulatory landscape has become increasingly complex, with in-creasingly frequent updates and chang-es. Moreover, the costs for non-compli-ance have risen dramatically with higher penalties and compensatory fines being imposed by the different regulatory au-thorities and mortgage agencies.

Can you keep up with the ever-changing compliance and investor re-quirements without hiring a small army of specialists in your operation? They would need to review changes, deter-mine operational and technical impact, build solutions, and then test to assure that you will be in compliance by the due date. It’s certainly a daunting task.

A relationship with a subservicing partner that has broad expertise can help you achieve these objectives, assur-ing that your loans are serviced in com-pliance with all state and federal regula-tory parties, GSE, investor and all insur-ing entity guidelines and requirements, while delivering a process that is built on best practices.

In your long-term business planning cycle, you focus on strategic goals and actions necessary to manage and control costs while retaining flexibility in your op-erations. Subservicing allows you to lock down your servicing costs while retaining the flexibility to better manage portfolio volume changes and address compliance-related business requirements.

IN-HOUSE VS. OUTSOURCED COSTSTypically, working with an estab-

lished subservicing company will be more cost-effective than trying to retro-

There are numerous reasons to consider subservicing as an alternative to an

in-house servicing operation. The

most challenging is compliance.

Managing RiskAn Alternative to Servicing Your Loan PortfolioBy David J. Miller Jr.



fit your existing servicing platform to the changing requirements. The costs for the required servicing technology, trained staff, different support systems and compliance monitoring make it dif-ficult to be cost-competitive without ser-vicing at least 150,000 loans.

Using a subservicer enables you to adjust your volumes more easily in re-sponse to changing market conditions and secondary market pricing oppor-tunities, without having to support the fixed costs for an in-house servicing op-eration. Taken all together, subservicing can be a cost-effective alternative given the resource constraints that you face.

Subservicing also allows you to of-fer new products to your members and expand your services. By working with an experienced subservicer with a strong staff and technology, your credit union can offer a wider range of fixed-rate and adjustable-rate loan programs, provide various types of conventional and govern-

ment loans and better serve your member base. You will also be able to access spe-cialized housing agency and other financ-ing programs without having to develop and support the required servicing for these different products internally.

SUPPORT FOR SELLING STRATEGIESBest execution – isn’t that what it’s

all about? Many credit unions today who are servicing in-house follow past practice, putting the loans on their bal-ance sheet rather than exploring a broad-er delivery into the secondary market. And while there are clearly investment considerations, their execution is tied to a specific delivery method because of ei-ther a systems limitation or limited ser-vicing knowledge tied to their investor reporting capabilities.

A good subservicer will provide the flexibility to support all of your selling strategies as well as supporting your

business as you look for best execution for your new originations.

David J. Miller Jr. is Executive Vice President and Business Development Di-rector at Cenlar FSB, a leading loan servic-ing provider for more than 40 years. You can reach him at [email protected].

Subservicers handle all of the traditional servicing activities,

from the loan closing through

payoff, foreclosure or sale of servicing.

MGIC Go!The fastest way to move-in day for your HomeReadyTM

and Home Possible® loans

Fannie Mae’s HomeReady and Freddie Mac’s Home Possible and Home Possible Advantage® require no changes from MGIC — meaning there isn’t a faster, simpler way to get MI for your loans than with MGIC Go!

Go to mgic.com/goodtogo to learn more!



Are You Prepared for the Spring Home-Purchase Market?It’s Not Too Soon to Make Product and Services Decisions to Help MembersBy John Castiello

Although it’s wintertime in Phila-delphia, crocuses already are starting to come up in my garden—very unusual weather for this time of year.

What does this have to do with mort-gages? Well, just like the weather, the industry can be very unpredictable and you never know what new challenges will come our way.

We have adjusted to the regulatory changes over the past few years with QM and TRID taking up a sizeable amount of our time and resources. But now it’s time to get ready for our next challenge, one filled with opportunities to help your members achieve their goal of homeownership and wealth creation.

It’s time to start thinking what you

will do to drive purchase business now that the “Fed” has started increasing in-terest rates. Are you up for the challenge?

While football consumes many folks time on winter weekends, baseball man-agers are already working hard behind the scenes to get ready for the spring sea-son. Are you doing the same?

Do you have the products and servic-es that your members will require, and the processes in place to manage their expectations?

Whether you are coming up with a new portfolio product or getting your systems ready for Fannie Mae’s new HomeReady program, you must be pre-pared to handle the increase in purchase volume that is coming your way.

WHO WILL YOUR BUYERS BE?What is the best way to assist your

members and make the mortgage ex-perience a pleasurable one? Will your spring lineup be able to attract and re-tain the next wave of homebuyers? Let’s first examine the market (and buyers) and what we will need to do.

Retirees are starting to come back into the market since their properties have returned to a positive equity posi-tion, and contrary to popular norms, se-niors are buying larger homes.



Millennials seem to be our biggest target market, but some are still hesitant to buy due to high student debt, lack of downpayments, concerns over job stabil-ity or they just do not have an interest in owning after what happened to property values during the last downturn.

Diverse Markets are also a great po-tential source of production for us. A sig-nificant number of new household for-mations in the next 10 years will come from diverse markets. Are you prepared with a diverse market strategy to attract the Asian, Hispanic and African Ameri-can borrowers entering the market?

Having products and programs that will meet the needs of these markets will be essential for mortgage originations. Fannie Mae’s HomeReady program ad-dresses some of these issues, especially for diverse markets where there is a need to use extended household income for purchases.

Renters also make up a large seg-ment of the opportunity for mortgage originations, and we need to present a compelling argument for renters to enter the purchase market, such as the oppor-tunity for them to build wealth through real estate rather than enriching others.

To engage each of these segments and entice them into the market, we must promote the fact that they don’t need a 20% downpayment and then demonstrate the financial benefits of purchasing a home vs. renting. Then your members can see that purchasing a home and starting on the path of wealth creation can happen sooner and be more affordable than they realized.

RENTING VS. OWNINGLet’s take a close look at scenario of

renting vs. owning with a 3% downpay-ment and a sale price of $250,000. We’ll assume a $242,500 30-year fixed loan at 4% interest with $5,000 in real estate taxes and $800 homeowner’s insurance annually.

We’ll contrast that with a monthly rent payment of $1,800.

Based on a five-year pro forma, rent-ing the property would require a cash outlay of $109,800 including the secu-rity deposit. Purchasing the home would require total payments of $ 118,000 for

PITI, which includes mortgage insur-ance. But this isn’t the entire picture. Based on the principal reduction and downpayment, your member now has a positive equity position of $30,665 and at an appreciation rate of 2% annually, an additional equity position of $26,020.

The benefits of owning truly surpass the rental option. and that’s not includ-ing possible tax saving benefits for those that itemize. These numbers also dem-onstrate the reason to buy now, so that your member can get started on the path of wealth creation with home prices and rates still low. Waiting even a few years to buy could cost them considerably—both in financing and appreciation.

THE HOMEREADY PROGRAMIn the 2015 homebuyers profile pub-

lished by the National Association of Re-altors, multigenerational households ac-counted for 11 to 19% of home purchases. The overriding factor in these purchases was children purchasing properties with their parents to care for aging parents and save on costs. NAR’s report also breaks down the information regionally.

HomeReady allows for non-borrow-er income to be used as a compensating factor for loans with DTIs between 45% and 50% (providing that the income is at least 30% of the qualifying income in the transaction). It also allows for a maximum LTV of 97%. The program eliminates the Loan Level Price Adjust-ment (LLPA) for loans with a 680 credit score and LTVs greater than 80%.

Fannie Mae also has reduced the MI coverage to 25% for loans with LTVs greater than 90%. The pricing advan-tage due to the reduction of the LLPAs and the added benefit of the reduced MI leads to a compelling financing package for loans that meet the Area Median In-come (AMI) limits of the program.

Millennials with small downpay-ments are also good candidates for this program. A 97% LTV loan with attrac-tive pricing could be just the product to get them back into the market.

Recent articles have indicated that retirees are also coming back into the market due to the return of equity in their properties. They are looking to pur-chase new housing units, and in some

cases, larger homes than they have now. Since HomeReady is not just for first-time homebuyers, they are a perfect fit for the program. Remember: there are AMI restrictions that apply, but 51% off all census tracts are at 100% of the AMI or no income limit at all.

OTHER STRATEGIES TO CONSIDERFannie Mae shouldn’t be the only

product innovator. With your portfo-lio capabilities and increasing interest rates, ARM loans look to be making their way back.

With the agencies only purchasing 1-year, 3/1, and 5/1 ARMs, credit unions have the ability to create ARM products that are more compelling with prices better than agency adjustables. The 3/3 and 5/5 ARM are viable alternatives to agency loans and provide your members

Whether you are coming up with a new

portfolio product or getting your

systems ready for Fannie Mae’s new

HomeReady program, you must be prepared

to handle the increase in purchase volume that is coming

your way.



with more peace of mind around pay-ment adjustments.

Mortgage insurance also offers a va-riety of options for credit unions that are typically seen in only a small number of lenders. Lender-paid monthly mortgage insurance is an excellent product to of-fer with your adjustable rate mortgages, whereas single premium lender-paid MI is not feasible for portfolio products. The portfolio credit union ARM with month-ly lender-paid MI translates into lower monthly payments and possible addi-tional interest deductions, which your competitors are probably not offering.

If you have the right products and programs ready, you should see heavy volume in the spring, which is a very good thing but can cause operational issues if you aren’t equipped to handle that volume. You may want to consider outside service providers to assist you

in the various stages of the loan manu-facturing process. Services from pro-cessing, contract underwriting, pre- and post-closing quality control, shipping and delivery, and secondary marketing can all be obtained to assist you during heavy volume periods or to offset your fixed costs with variable costs. But you should be assessing those resources now.

This is the time to get ready for spring. Plant the seeds for production with your products and programs. Add any addi-tional outsourcing needs you may require to handle the increased volume and watch your loan originations grow!

John Castiello is vice president and managing director at Radian, which pro-vides private mortgage insurance and related risk management products and services to mortgage lenders nationwide. To learn more, visit www.radian.biz.

With PHH Mortgage Correspondent Lending you get:

n Delegated and non-delegated channels

n 25 years of compliance expertise

n A full suite of mortgage products

n Our servicing help desk, offering support to both you and your members

Find out how PHH Mortgage can meet your challenges and exceed your expectations at www.phhmortgage.com/cl or by calling (888) 467-1524 (option 2).

Leverage a dedicated team focused on you, so you can focus on growing your business

In addition to Correspondent Lending, PHH Mortgage offers Subservicing and Private Label Solutions.

Fannie Mae shouldn’t be the only product innovator. With your portfolio

capabilities and increasing interest rates, ARM loans look to be making

their way back.

20th AnniversaryACUMA Conference

In 20 years, the American Credit Union Mortgage Association (ACUMA) has grown from a handful of credit union people trading notes to an organization providing mortgage-lending credit unions access to the industry’s leaders, innovators and their own peers to learn and share the knowledge. ACUMA has built its foundation on education and networking. Now, to celebrate its growth along with the growth of credit union mortgage lending, ACUMA invites you to our nation’s capital to discuss the next steps to keep building on success.

The 20th anniversary ACUMA Conference brings you to our nation’s capital to:n Listen to presentations by congressio-

nal representatives, industry leaders and top government regulators.

n Discuss important mortgage-lending issues with your peers, presenters and a variety of government officials engaged in legislation and regulation

of the mortgage lending industry.n Learn more about how to advocate for

credit union mortgage lending and why it’s so important to the future.

n Participate in ACUMA’s special 20th anniversary events, including a clos-ing-day rooftop luncheon overlooking the Capitol and a luxury bus tour of this beautiful city.

Near downtown, the high-rise hotel is less than a mile from the White House and just over a mile to the Washington Monument. In addition to conference facilities, the hotel offers three restaurants, a bar, a coffee shop, a full-service spa and a fitness center.

Washington, D.C. n September 19-21, 2016

For more information about conference registration, visit ACUMA’s website at www.acuma.org and click on Event Calendar.



FIGURE 1 EMPLOYMENT CHANGES IN ENERGY PATCH STATES

Job Market Weakens but Home Prices Rise in ‘Energy Patch’ StatesBy Ralph DeFranco, Ph.D

It’s been a year and half since energy prices began plunging. A barrel of oil that sold for $115 in June 2014 was priced at just $35 around the end of 2015. As we move into 2016, it is worth assessing employment and housing trends in U.S. coal-, oil- or gas-producing regions—the so-called “Energy Patch”—and studying the implications for credit unions.

Overall, lower energy prices are con-tributing to economic growth, saving the average U.S. family about $550 a year, even as exports have been hurt by a ris-ing dollar and weakness overseas. The U.S. economy is currently generating a healthy 2.5 million net new jobs a year.

Nevertheless, total employment in the Energy Patch (Alaska, Louisiana, New Mexico, North Dakota, Oklahoma,

Texas, New Mexico and Wyoming) has been deteriorating and likely hasn’t hit bottom yet. (See Figure 1.)

EMPLOYMENT TRENDSAs Figure 1 shows, total employment

fell fastest in North Dakota, the state that experienced the largest energy-re-lated boom in recent years. Our analysis suggests that North Dakota is the most vulnerable to home price declines since home prices there are now about 20 per-cent higher than what we would expect, given the historic relationship between income and home prices.

California, Colorado and Pennsyl-vania were not included in the Energy Patch charts since their employment

growth has not appreciably slowed and energy extraction is a small share of their economic activity.

Texas employment is trending down-ward in similar fashion to neighboring oil- and gas-producing states. In Figure 2, we take a deeper look at several cities in Texas that show the slowdown in broad-based trends.

HOUSING TRENDSTurning from employment to hous-

ing, the situation in the Energy Patch is decidedly mixed:

• Home prices have held up well,growing at about the same rate as the year before.

Aug 2015Apr 2015Dec 2014Aug 2014Apr 2014Apr 2013 Dec 2013Aug 2013 Nov 2015

+5%

+4%

+3%

+2%

+1%

0

-1%

-2%

-3%

Sources: U.S. Bureau of Labor Statistics, Moody’s Analytics, Arch MI



FIGURE 2 NON-FARM EMPLOYMENT CHANGES IN TEXAS & LIGHT SWEET CRUDE FUTURES PRICE PER BARREL

Sources: U.S. Bureau of Labor Statistics, U.S. Energy Information Administration, Moody’s Analytics, Arch MI. Gray bars indicate recessions.

• Mortgage delinquency rates have actually been improving except in Alaska and North Dakota (per the Mortgage Bankers Association 60-day delinquency rate).

• New home builders have been cut-

ting back on production as sales have weakened.

Even though home prices have held up well (Figure 3), it is reasonable to expect home price growth will slow in these states over the next few years.

Some boomtowns, such as Williston, North Dakota, are very likely to see home price declines, while most of the larger cities will probably experience anemic growth as other sectors of the economy, such as health care, slowly expand.

+15%

+10%

+5%

0

-5%

-10%

$160$140$120$100

$80$60$40$20

$020132011200920072005200320011999199719951993 2015

FIGURE 3 HOME PRICE GROWTH IN KEY ENERGY PATCH STATES

2015Q22014Q42014Q22013Q42013Q22012Q42012Q2

+12%

+10%

+8%

+6%

+4%

+2%

0

-2%

2015Q22014Q42014Q22013Q42013Q22012Q42012Q2

+6%

+4%

+2%

0

-2%

Source: FHFA All-Transaction Index, Moody’s Analytics, Arch MI.



CONCLUSIONSFigure 5 summarizes our views on

which of the Energy Patch states are most at risk of experiencing price de-clines and why.

We are most concerned about the less populated states of Alaska, North Da-kota and Wyoming because of their high share of employment in energy extrac-tion and weakness in the jobs market.

We also are concerned about coal mining areas such as West Virginia, since competition from natural gas has hurt coal prices. Other states worth watching are Louisiana, Oklahoma, New Mexico and Texas.

Employment and housing conditions will likely remain weak and probably worsen somewhat in most of the Energy Patch for several more years, particularly in Alaska, North Dakota, Wyoming and West Virginia.

Certainly home sales will continue to lag and the risk of price declines are elevated, but a widespread housing bust is not the most likely scenario.

Fortunately, direct employment in fracking was relatively small, except in thinly populated areas such as western North Dakota. It is true that boomtowns like Williston, North Dakota, are in for a protracted contraction, but that isn’t true for most of the larger cities in the Energy Patch states. Since the fracking boom only lasted three or four years, it didn’t create a widespread housing bub-ble. Home valuations are far more rea-sonable now than before the large “Oil Patch” bust in the 1980s. The notable exception is North Dakota, where we es-timate that home prices are overvalued by roughly 20 percent.

We expect several years of substan-dard growth, but not a repeat of the

regional-wide recession that occurred in the 1980s. Conditions are stronger now than in the 1980s, thanks to a more diversified employment base, a well-capitalized financial sector (a regional financial crisis greatly exacerbated the problems in the 1980s), still-affordable home prices and spillover benefits of sol-id employment growth from the United States overall.

Clearly, credit unions that are high-ly concentrated in Energy Patch states need to be especially vigilant with credit guidelines and loan quality control, and should carefully monitor housing mar-ket conditions in their footprint.

Ralph DeFranco, Ph.D., is the Housing Economist for Arch Mortgage Insurance Company.

FIGURE 5 RISK OF HOME PRICE DECLINES*

* Source: Arch MI. The Arch MI Risk Index® estimates the probability home prices will be lower in two years, times 100. It comes from a statistical model based on regional unemployment rates, affordability, net migration, housing starts, the percentage of delinquent mortgages, the difference between actual and estimated fundamental home prices (based on income), and judgmental adjustments. We do not predict the size of potential home price declines, just the likelihood of prices being lower by any amount two years from now

** Total year-over-year change in total employment as of November 2015.

Figure 6 summarizes our views on which of the Energy Patch states are most at risk of experiencing price declines and why.

We are most concerned about the less populated states of Alaska, North Dakota and Wyoming because of their high share of employment in energy extraction and weakness in the jobs market.

We also are concerned about coal mining areas such as West Virginia, since competition from natural gas has hurt coal prices. Other states worth watching are Louisiana, Oklahoma, New Mexico and Texas.

[ Note: Figure 6 follows. I was able to edit this chart, but please try to make it look good. Thanks. ]

RISKS OF HOME PRICE DECLINES (FIGURE 6)

State

Probability

of Home

Price

Declines

Annual

Change in

jobs**

(Nov 15)

Comments

North Dakota

46% -2.9%We estimate home prices are highly overvalued due to the fracking boom.

Wyoming 37% -0.7%Mining employment in the nation's largest coal producer has fallen to 10-year lows.

Alaska 33% 0.1%Home price growth is decelerating as low energy prices have waylaid the most oil- dependent economy in the nation.

West Virginia

33% -1.4%Coal prices and employment are hurt by competition from cheap natural gas.

New Mexico

31% 0.4%At risk of a recession due to government- and energy-related job losses.

Oklahoma 28% -0.1%Total employment fell in the past 3 months and home prices are decelerating.

Louisiana 28% -0.6%Economy is still growing, but new home construction is down.

Texas 26% 1.5%Employment growth remains weak, but positive in recent months. Home prices growing faster than the national average.

* Source: Arch MI. The Arch MI Risk Index® estimates the probability home prices will be lower in two years, times

100. It comes from a statistical model based on regional unemployment rates, affordability, net migration, housing

starts, the percentage of delinquent mortgages, the difference between actual and estimated fundamental home

prices (based on income), and judgmental adjustments. We do not predict the size of potential home price

declines, just the likelihood of prices being lower by any amount two years from now

[ Note: Resume article text. ]

Page 5

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Copyright © 2016, Financial Industry Computer Systems, Inc. All rights reserved.


ACUMA: WORKING FOR YOU

ACUMA traveled to the National Association of REALTORS® conference in San Diego in November. Here, representing ACUMA, Jennifer Burlison and Sharon Brazelton from the FHLB Chicago, explain the benefits of partnering with credit unions to a pair of REALTORS®.

Discussing mortgage issues in Washington, D.C., are (from left) NCUA small credit union training coordinator Kathryn Baxter, ACUMA President Bob Dorsa, ACUMA Board Member and Tower Federal Credit Union SVP/CLO Barry Stricklin, NCUA economic development specialist Dominic Carullo and NCUA staff attorney Joe Goldberg. Not shown is NCUA regional lending specialist John Mehmet.


ACUMA: WORKING FOR YOU

ACUMA: Working for YouAttendees at the 2015 ACUMA Conference listen to Jared Ihrig, CUNA’s chief compliance officer, address a general session in Las Vegas.

Above: A Boston ACUMA workshop panel of (from left) Alissa Sykes, VP of Lending at Sunmark FCU; Michael Spiellman, VP of Marketing and Business Development at Pathways Financial CU, and ACUMA consultant Tracy Ashfield discuss how to measure mortgage lending success and market share. Right: Brian Sacks, a mortgage origination expert, offers tips on developing successful relationships with Realtors during his workshop presentation in San Francisco.

In 2015, ACUMA sponsored events and held high-level meet-ings to benefit its membership of mortgage-lending credit unions, CUSOs and other mortgage professionals. The 19th annual ACUMA Conference, held in Las Vegas in September, brought together nearly 400 mortgage pros to share ideas, learn from nationally known speakers and network with like-minded individuals. ACUMA held workshops in Boston and San Francisco during the year to provide opportunities for

more of a nuts-and-bolts, small-group learning experience on specific topics. A committed advocate for credit union mort-gage lending, ACUMA worked to “spread the word” at the National Association of REALTORS® convention. Later in the year, ACUMA representatives held discussions with NCUA of-ficials in Washington, D.C. In 2016, the ACUMA agenda is even more ambitious, culminating with a special 20th anniversary conference in September in the nation’s capital.


FEATURE ARTICLE


MORTGAGE METRICS TO TRACK PERFORMANCE

Studying credit union mortgage lending performance is more than a hobby for us; it’s an avocation. We’ve been interested in it since we became mortgage lenders—way before online lending was a “thing.” n Maybe that’s just because we’re a couple of mortgage and math nerds. Or maybe it’s because of the gross inefficiency we observed in the lending process early in our careers. n In either case, our goals were to identify a small number of easily derived, directly comparable metrics and track them over time, knowing that credit union mortgage lenders would benefit from the exercise.

The Road to

High Performance Credit Union Mortgage LendingSix Key Indicators Can Help Show You the WayBy Nizar Hashlamon and Dan Green



The latest result of these efforts is our 2015 High Performance Lending Study, a look at credit union lend-

ing performance for the three years end-ing with 2014. It’s an interesting period of time since it starts with the waning days of the 30-year refinance boom and ends, for now, with the dawn of a mortgage market none of us have ever seen: One dominated by purchase lending in an incredibly com-plex compliance environment.

WHAT WE MEASUREFor our study, we use six distinct Mort-

gage Performance Indicators (MPIs) for their simplicity of explanation, calculation and comparability. Four of them are well-known and well-used:n Velocity: The number of days elapsed

from application to closing.

n Pull-through: The ratio of closed loans to submitted applications.

n Productivity: Closed mortgage loans per mortgage em-ployee per month.

n Cost-to-close: The sum of mortgage labor costs, direct mortgage costs, indirect mortgage costs and mortgage tech-nology costs, divided by the number of closed loans, for a 12-month period. (This is Nizar’s favorite metric.)

The other two MPIs aren’t widely used in the industry, though they serve to provide some behavioral explanations for the other four as well as additional insight into market dynamics:n Member Mortgage Share—The ratio of closed loans in a

calendar year to the number of members reported on the December 31 NCUA 5300 Report.

n Mortgage Employees Per Thousand Loans Closed—Di-vide the total number of mortgage employees by total loans closed annually. Multiply by 1,000.

You might say these six MPIs are too simple or too high-level. They are intentionally designed to be directionally cor-rect and diagnostically oriented, which means two things. First, they provide a strong indication of actual performance, and second, they should lead to further interrogation.

Every mortgage lending credit union can, and should, cal-culate these metrics in-house using a more detailed level of fi-nancial and statistical data than is available to us. And review-ing the study’s results should lead to questions, lots of ques-tions, which in turn should lead to action, and plenty of it.

HOW DID WE GET HERE?Our study found that cost-to-close is

rising, and productivity is dropping. Three factors seem to tell the story of why this is happening.

First, credit union mortgage volume, on a unit basis, dropped 25% in 2014 while mortgage employment, in absolute terms, remained relatively constant.

Second, purchase loans became 50% of the mix for the first time in many years. Purchase loans are harder to make than refinance loans, take longer and are not as abundant.

Third, the compliance environment appears to be a factor. The compliance role, on a percentage basis, grew at a faster rate than any other in 2014. Is this a trend? It’s too early to tell, but it’s certainly a data point to watch.

WHAT’S A CREDIT UNION TO DO?Reading between the lines, it might ap-

pear the message here is “cut your head count,” but that is not necessarily the case. High performance lending does, however, boil down to one simple equation: productivity. As discussed above, this is reflected in the ratio of closed loans per month to the number of employees that closed those mortgages. These are easy numbers to collect, and the math is elementary.

Is this ratio hard to adjust? It can be. Old school mortgage banking suggests dealing with head count first—the denomi-nator in the productivity equation. While this can be an im-mediate short-term fix, remember that we are in uncharted territory.

Wide swings between purchase and refinance are a thing of the past, and the regulatory and compliance environment is more complex than ever before. No one has much experience in this strange, new world, and there is even less data, so it is impossible to determine optimal staffing levels. Old-school rules may not be the best answer.

BUILDING MARKET SHAREWe suggest focusing on opportunity by building market

share; this means an increase in closed loans—the numerator in the productivity equation. We should remember that, while overall mortgage industry volume is down, credit union lending opportunity is up as illustrated by the member share MPI. It declined to 0.79% in 2014, down from 1.31% the previous year.

CUNA and Affiliates research explains the drop. Member-ship in 2014 grew at a pace faster than at any time since 1994. New members mean new households, which brings new mort-gage opportunity and the chance to increase productivity.

With credit union membership up, there is even greater opportunity. Today’s new households are being formed by

We suggest focusing on

opportunity by building market

share; this means an increase in closed loans.



SIDEBAR MORTGAGE PERFORMANCE INDICATORSWhat Are They and How Do They Match Up with Your Operation?

The 2015 High Performance Lending Study by Accen-ture Mortgage Cadence examines credit union lending per-formance for 2012-2014. The study uses six Mortgage Per-formance Indicators (MPIs). Here are some key elements of the MPIs:

VELOCITY The Calculation: The number of days elapsed from ap-

plication to closing.Desired Result: Fast and furious. This MPI ranges from

rapid closes in the 40-day range to slower closes exceeding 70 days. Does closing faster help with pull-through, productivity, and cost-to-close, resulting in better price if sold in the secondary market? Logically, it should, though finding direct correla-tion has been elusive.

PULL-THROUGH The Calculation: The ratio of closed

loans to submitted applications, includ-ing To Be Determineds (TBDs)—appli-cations that, at the time of origination, lack a property address. They are in-cluded here because they represent real opportunity, even if that opportunity might not present itself for another 12 or 18 months. Yes, they have a delete-rious effect on this MPI. The point is, however, that borrowers behind TBD applications must be nurtured because many of them will turn into homeowners, and, therefore, borrowers. Remem-ber: A mortgage does not serve a purpose (service to the member or revenue to the credit union) unless it closes.

Desired Result: The higher the percentage, the better. Calculated this way, credit union pull-through takes place in a wide range—from slightly less than 20% to more than 80%—with most hovering around 40%, which has changed little over the past six or seven years. There is opportunity in this metric; pull-through ought to exceed 60%, and we ought to make getting there a goal. It is one sure way of improving productivity and expanding market share.

PRODUCTIVITY The Calculation: Closed mortgage loans per mortgage

employee per month. This is the single most important met-ric in the entire industry as far as high performance is con-

cerned. It is also an indicator as to how well a credit union is serving its members.

Desired Result: Here, too, the larger the number, the bet-ter. Results over the past several years range from a low of about 1.5 to a high of just over 9, with the current average in the mid-3s.

COST-TO-CLOSEThe Calculation: The sum of mortgage labor costs, di-

rect mortgage costs, indirect mortgage costs and mortgage technology costs, divided by the number of closed loans. All

figures are for a 12-month period. Desired Result: Low, lower, lowest.

The lower the cost-to-close, the more profitable and competitive the mort-gage operation. Cost-to-close increased in 2014 to the $4,000 range, to no one’s great surprise, but to everyone’s chagrin.

MEMBER SHAREThe Calculation: The ratio of closed

loans in a calendar year to the number of members reported on the December 31 NCUA 5300 Report.

Desired Result: Bigger is better. That said, this is a “small-result” calcu-lation. The industry average is approxi-mately 0.79%. Very few credit unions achieve a score better than 2.25%, so not only is it small-result, but narrow-

range as well. Like pull-through, this MPI is an opportunity indicator, and, judging by 2014 results, credit unions have plenty of opportunity.

EMPLOYEES PER THOUSAND CLOSED LOANSThe Calculation: Divide the total number of mortgage

employees by total loans closed annually. Multiply by 1,000.The Desired Result: This metric was introduced this

year, so it is hard to know in what range this MPI ought to fall. Like cost-to-close, it shares an inverse relationship with productivity, so, when productivity is high, employees per thousand loans closed ought to be low. Last year this mea-sure dropped into the low 20s. The previous two years it landed in the mid-teens, a much better result since smaller is better. With another year of data under our belts in 2016, we ought to be able to draw some conclusions on the range for this metric.

These six indicators provide a strong

indication of actual performance and should

lead to further interrogation.

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Credit Unions naturally share ideas, strategies, and best practices, but should never have to share their members.

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the Millennials, the single largest generation since the Baby Boomers.

Here’s where old-school rules may still apply: the mortgage is the gateway transaction to many other fi-nancial service needs. Grant the mortgage, open the checking account, issue the credit and debit cards, open the next car loan. Homeown-ers have a cornucopia of fi-nancial needs. That’s why seizing this opportunity is so important. (For more in-formation on this topic, visit the Accenture Mortgage Ca-dence website.)

FOCUS ON PRODUCTIVITYWe stress productivity

because of its close relation-ship to cost-to-close. Increas-ing productivity decreases cost-to-close. This is so be-cause labor is more than 50% of the cost side of the equation. If you use labor more efficiently, you save money.

One of the great gifts of our long-running research is our produc-tivity/cost curve. We calculate productivity (which is easy), plot it on the curve, and estimate cost-to-close.

We can then use the curve to visualize what’s possible with an increase in productivity. Simple yet powerful, this is one of the most important outcomes of this research, and one of the key reasons why we will continue with it.

Look for the results of our 2016 Study, which will be based on 2015 data. What do we expect to learn? Hard to know for sure. The MBA Study of mid-year 2015 showed a decrease in cost to close and a cor-responding increase in productivity. Good news indeed.

Not to be a wet blanket, but those results pre-date TRID, which has the potential to impact costs given that everyone—borrowers, Real-tors, lenders, and settlement service providers—have to relearn the mortgage business. We can’t wait to learn the results, and we’re just as eager to share them.

The lesson is clear: if you work on one thing this new year, work on mortgage lending productivity by concentrating on closed-loan vol-ume. Do that, and everything else falls into place.

Nizar Hashlamon is Global Head of Sales and Dan Green is Senior Business Operations Manager for Accenture Mortgage Cadence.

If you work on one thing this new year, work on mortgage lending productivity by concentrating on closed-loan volume.

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The name CU Servnet is new but we’ve been helping credit unions gain mortgage loan servicing for years. We began 10 years ago as Prime Alliance Loan Servicing Powered by Cenlar. CU Servnet creates mortgage loan servicing solutions through its partnership with Cenlar. Each credit union can create its own customizable solution that offers best-in class servicing with a superior member experience. Our Enterprise Risk Management (ERM) program integrates with your credit union to deliver a robust and compliant solution that is constantly monitored to meet all regulatory standards. Entrust your credit union’s mortgage loan servicing to us and you’ll have more time to focus on managing and growing your member relationships.

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FEATURE ARTICLE


U.S. MACRO OUTLOOK 2016

Moody’s Analytics U.S. Macro Forecast for 2016:n At this point, the best barometer of the economy’s

health is jobs. The economy is performing well.

n GDP appears understated by missing a significant amount of output in the information technology sector.

n If productivity growth doesn’t pick up soon, GDP will struggle even more.

n The decline in oil prices and investment in the energy industry may provide a boost to productivity. Productivity also should benefit from a more educated and mobile workforce.

n Business formation has meaningfully picked up; animal spirits are coming back to life.

U.S. Macro Outlook 2016:

The Economy Is in GearBy Mark Zandi



n

Depending on who you listen to and what economic data you look at, the

U.S. economy is either struggling to kick into gear or is already in high

gear. n For those down on the economy, there is GDP. Real GDP expanded

by just over 2% last year, about the same lackluster growth experienced during

the current expansion. And growth appears to have tailed off at year’s end,

tracking closer to 1% in the final quarter. Much of the recent GDP weakness is

related to less inventory accumulation, which is a temporary drag, but a widening

international trade gap will prove a more persistent impediment to growth

given the global economy’s ongoing struggles and the strengthening U.S. dollar.

For those upbeat on the economy, there is the job market. The economy is creating lots of all kinds of jobs. Payrolls swelled by 2.7 million last year, on top of 3.1 million in 2014. This is the best consecutive two-year performance since 1998-1999 during the tech stock bubble. There are no bubbles today. Unemployment and underemployment, which includes part-timers who want more hours and those who have stepped out of the workforce but say they want to work, are falling fast at the current pace of job growth. The economy will soon re-turn to full employment.

So which is it: Is the economy performing well or not? In my view, at this point in the expansion the best barometer of the economy’s health is jobs. The economy is performing well.

UNDERSTATED GDPSupporting this perspective is that GDP appears under-

stated. In the Bureau of Economic Analysis’ tally of GDP, the agency seems to be missing a significant amount of output in the information technology sector. This measurement problem is getting worse as this part of the economy grows bigger.

This is clearest with regard to business investment in infor-mation processing equipment. Real investment is derived by deflating nominal investment by its price. The price depends

on the power of that technology, which in the case of info processing equipment is measured in large part by the speed of semiconductors. Dur-ing the late 1990s technology boom, chip speed was increasing rapidly, re-sulting in double-digit measured price declines. Real investment thus soared.

Today, measured prices for info processing equipment are actually increasing, according to the BEA. Not because chip technology is no longer advancing, but because the chip mak-ers are less focused on chip speed and more focused on other features of the chips that aren’t being captured, such as battery life and the versatility of those chips. Measured real investment is thus expanding slowly, which is cut-ting into measured GDP.

Capturing the improving power and quality of business software is also difficult, which has be-come especially important since investment in software has recently surpassed that in info processing equipment.

An even more vexing measurement problem plaguing the GDP numbers may be that posed by the explosive popularity of social media and other digital content. Namely, that due to the introduction of new products, especially of those that are free or nearly so. Snapchat, for example, is all the rage, particu-larly among young people, and it is free. It is unlikely the BEA is measuring the impact of Snapchat-like new products in its price and GDP estimates.

The contraction in oil prices and

investment in the energy industry may also provide

a boost to productivity.



The upshot is that inflation has probably been meaning-fully weaker and real GDP growth stronger during the recovery than the BEA’s data currently suggest. Future revisions to the GDP data will likely bear this out.

PRODUCTIVITY SLUMPThe difference between pedestrian GDP growth (even after

abstracting from the measurement problems) and strong job growth is evident in slumping productivity. During the current expansion, overall nonfarm business productivity has expand-ed at an anemic near 1% per annum pace, and an even weaker 0.5% pace in the past several years.

This compares with productivity growth of near 2% per an-num on average since World War II, and is the worst productiv-ity performance since the late 1970s. The 1970s were plagued by oil embargos and spiraling energy costs, which made much of the nation’s capital stock obsolete. That’s clearly not a viable explanation today given the slide in oil prices.

Weak productivity hasn’t been much of a concern during this expansion. With so many unemployed and underemployed, the number-one priority has been getting back to full employment. But with full employment now coming into view, if productivity growth doesn’t pick up soon, GDP will struggle even more.

GDP growth will be constrained by the sum of the growth in the labor force and pro-ductivity. Given demographic trends, labor force growth is set to slow to near 0.5% per annum by the end of the decade. If productiv-ity gains remain stuck at their current 0.5% per annum, then GDP growth will throttle back to a scarily anemic 1% per annum.

This is half the 2% per annum GDP growth that Moody’s Analytics and others, including the Congressional Budget Office and Social Security Administration, are as-suming through decade’s end. The implica-tions of the difference between 2% and 1% per annum growth for living standards, the fiscal outlook, and asset returns and house-hold wealth are dark.

Whether the economy continues to per-form well thus critically depends on whether productivity growth soon revives. It should. Various cyclical forces have conspired to weigh on productivity growth in recent years, and they are set to lift.

FINANCIAL REGULATIONEspecially notable is the impact of the sea

change in the regulation of the financial sys-tem in the wake of the financial crisis. The

Dodd-Frank regulatory reform has forced enormous changes on the system, including requiring the nation’s biggest banks to hold substantially more capital and increase their liquid-ity. The bank stress-testing process has also fundamentally changed risk management practices in many institutions.

The regulatory changes have put the financial system on much firmer ground, but they have also undermined produc-tivity in the financial sector. Indeed, nonfinancial corporate productivity growth has held up much better than nonfarm business productivity, expanding by 1.75% per annum during the expansion.

The financial sector’s adjustment to the new tougher reg-ulatory regime is finally winding down, suggesting that pro-ductivity gains should normalize. Our working assumption is that financial sector productivity will soon be expanding at the same pace as productivity in the nonfinancial sector. Through

Sources: BEA, Moody’s Analytics

1510050095908580-14

420

-2-4-6-8

-10-12

Info processing de�ator, % change yr ago, 4-qtr MA

FIGURE 1 HAS TECHNOLOGY CHANGE COME TO A STANDSTILL?

Sources: BLS, Moody’s Analytics

1514131211100998

114112110108106104102100

Labor productivity, 2009Q2=100

Nonfarm businessNon�nancial corporate

Avg annual growth during recovery:Nonfarm business = 1.1%Non�nancial corporate = 1.75%

Sources: BLA, Moody’s Analytics

1005009590-1

6543210

Number of establishments, % change yr ago, 4-qtr MA

FIGURE 2 FINANCIAL SECTOR WEIGHS HEAVILY ON PRODUCTIVITY

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the end of the decade, nonfarm business pro-ductivity is thus expected to grow at 1.75% per annum.

ANIMAL SPIRITSThe risk-taking necessary to support the

innovation so key to productivity growth had seemed undermined by the crisis. The num-ber of new-business establishments, which had been growing by close to 3% annually during the 1990s, and near 2% in the 2000s prior to the crisis, fell sharply during the downturn. Entrepreneurship was sidelined by the tough economy, lack of credit, and dour sentiment.

Things have changed. Business forma-tion has meaningfully picked up, with the number of new establishments growing by close to 2% again in 2015, and accelerating as the year ended. The increase in establishments is evident across all industries, but is strongest in professional services, education and healthcare, and particularly in the software in-dustry. Entrepreneurship appears to be back.

It will take some time for these new businesses to have an impact on the aggregate economic statistics, including produc-tivity. But this is the clearest sign yet that those animal spirits necessary to drive productivity are finally coming back to life.

ENERGY BOOM-BUSTThe contraction in oil prices and investment in the en-

ergy industry may also provide a boost to productivity. Prior to the bust, the fracking boom had lifted energy investment to its highest share of GDP since the early 1980s. While the increased oil production has enormous economic benefits, in-cluding making the economy less sensitive to the energy price shocks that have been a catalyst for nearly every modern recession, it also likely divert-ed resources away from investment in labor productivity enhancing investment, such as information processing equipment and R&D.

Now that substantially fewer investment dollars are headed to the energy industry, more should go into productivity-enhancing activities. Rising labor costs could further support this shift, as businesses likely had become complacent about using labor more efficiently given the heretofore slack job mar-ket and low wages.

MOBILE AND SMARTProductivity also should benefit from a

more educated and mobile workforce. An ironic plus coming out of the recession is a more educated workforce. Many twenty-

somethings who could not find work stayed in school or went back. One-third of the employed now have college degrees; giv-en the previous surge in enrollment, this share will continue to rise quickly.

The workforce is also starting to move again. The U.S. job market has historically been characterized by significant churn, with millions losing, leaving and taking jobs each month. This movement enhances productivity as workers move from jobs they do not care for to jobs that better match their preferenc-es and skills. The willingness and ability of workers to move with ease from job to job is a comparative advantage of the U.S. economy. Mobility, which had declined sharply as a result of the recession, is now picking up, as is evident from the in-creased frequency of quits and hires.

The coming productivity revival is still very much a fore-cast, with a considerable amount of uncertainty. Much hinges on whether and when new technologies come to fruition. Nan-otechnology, 3D manufacturing, human-genome sequencing,

Sources: BLS, Moody’s Analytics

1514131211100998

114112110108106104102100

Labor productivity, 2009Q2=100

Nonfarm businessNon�nancial corporate

Avg annual growth during recovery:Nonfarm business = 1.1%Non�nancial corporate = 1.75%

Sources: BLA, Moody’s Analytics

1005009590-1

6543210

Number of establishments, % change yr ago, 4-qtr MA

FIGURE 3 ANIMAL SPIRITS REVIVE

Sources: BLS, Moody’s Analytics15100500

8.5

8.0

7.5

7.0

6.5

6.0

5.5

% change, 3-mo MA

Hires and separations rate (L)Quit rate (R)

1312

9

1110

8765

FIGURE 4 MORE LIFE IN THE LABOR MARKET



fracking, drones, and driverless ve-hicles could be game-changing. How-ever, they may not be. Even if they are, some well-respected economists argue that these potential changes pale in comparison with past innovations such as the steam engine, the tele-phone or indoor plumbing.

Moreover, there are those who believe that the productivity slump is here to stay. They argue that produc-tivity may pick up from its current moribund pace, but not by much, and certainly not enough to get to 2% GDP growth on a sustained basis. The economy is ensnared in so-called secular stagnation.

Perhaps, but this would run counter to a constant of U.S. eco-nomic history, namely the ingenuity and creativity of American businesses and workers.

Mark M. Zandi is chief economist of Moody’s Analytics, where he directs economic research. Moody’s Analytics, a sub-sidiary of Moody’s Corp., is a leading provider of economic re-search, data and analytical tools. Dr. Zandi is a co-founder of Economy.com, which Moody’s purchased in 2005. Zandi’s recent research has focused on mortgage finance reform and the de-terminants of mortgage foreclosure and personal bankruptcy.

ABOUT MOODY’S ANALYTICS ECONOMIC & CONSUMER CREDIT ANALYTICS

Moody’s Analytics helps capital markets and credit risk management professionals worldwide respond to an evolving marketplace with confidence. Through its team of economists, Moody’s Analytics is a leading independent provider of data, analysis, modeling and forecasts on national and regional econ-omies, financial markets, and credit risk.

Moody’s Analytics tracks and analyzes trends in consumer credit and spending, output and income, mortgage activity,

population, central bank behavior, and prices. Our customized models, con-cise and timely reports, and one of the largest assembled financial, economic and demographic databases support firms and policymakers in strategic planning, product and sales forecast-ing, credit risk and sensitivity manage-ment, and investment research. Our customers include multinational cor-porations, governments at all levels, central banks and financial regulators, retailers, mutual funds, financial insti-

tutions, utilities, residential and commercial real estate firms, insurance companies, and professional investors.

Our web and print periodicals and special publications cover every U.S. state and metropolitan area; countries throughout Eu-rope, Asia and the Americas; and the world’s major cities, plus the U.S. housing market and other industries. From our offices in the U.S., the United Kingdom, and Australia, we provide up up-to to-the the-minute reporting and analysis on the world’s major economies. Moody’s Analytics added Economy.com to its portfolio in 2005. Its economics and consumer credit analytics arm is based in West Chester PA, a suburb of Philadelphia, with offices in London, Prague, and Sydney. More information is available at www.economy.com.

© 2016, Moody’s Analytics, Inc. and/or its licensors and af-filiates (together, “Moody’s”). All rights reserved. ALL INFOR-MATION CONTAINED HEREIN IS PROTECTED BY COPY-RIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINAT-ED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSE-QUENT USE FOR ANY PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHAT-SOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT. Reprinted with permission.

All information contained herein is obtained by Moody’s from sources believed by it to be accurate and reliable. Be-cause of the possibility of human and mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall Moody’s have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of Moody’s or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such informat information, or (b) ion, any direct, indirect, special, consequential, compensa-tory or incidental damages whatsoever (including without limitation, lost profits), even if Moody’s is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The financial reporting, analysis, projections, observations, and other information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell, or hold any securities. NO WARRANTY, EX-PRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER. Each opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation prior to investing.

The upshot is that inflation has probably

been meaningfully weaker and real GDP

growth stronger during the recovery than the BEA’s data currently suggest.



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FEATURE ARTICLE

THE BRAIN DRAIN BATTLING THE CLOCK

By Tom Burton

RECR

UITIN

G

RETIREMENT


RECRUITING MILLENNIALS

The clock is ticking for credit unions to remain relevant and

successful. Every day across the nation thousands of Baby

Boomers are retiring, taking with them knowledge and experience

that is not easily replaced. n For credit unions the situation is

more urgent. The average age of a member is pushing 50, well

above the nation’s average. The same is apparent for credit

union employees, creating the potential for not only a leadership

void, but also a lack of competent employees to keep the

operation running smoothly. n How can credit unions reverse

this brain drain? The solution lies in the ability to recruit the

next biggest generation—the Millennials—to become employees

and eventually leaders, and to help attract young members.

Radian is packing a one-two punch for your members

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The situation isn’t so dire for tellers or member services representatives. Those jobs likely will be filled with will-ing bodies as long as the jobs are available.

But the mortgage lending department is another matter entirely. To fill jobs and retain good employees, credit unions need to re-evaluate hiring, training and retention—and make necessary changes to keep loan operations running smoothly.

The expectations of Millennials are much higher for the workplace. While many of the current mortgage professionals spent a decade or more learning the ropes before moving into leadership positions, few among us believe the new generation of workers will wait even half that long to gain “meaningful” jobs before deciding to move on to more challenging and gen-erationally comfortable situations.

What can your shop do to ensure that newly recruited Mil-lennials will find the right work culture and attractive jobs to stick around and really help you? Can you beat the clock and attract this group of young adults?

The bottom line: If you don’t, your mortgage operation may not survive, or at the least, both you and your members will suffer in the years to come. If you haven’t already devel-oped strategies to bring in the twenty-somethings, train them, and keep them happy, then you’re behind in the race and time runs short.

WE’RE TALKING BIGIn case you haven’t been paying attention to the constant

barrage of information about Millennials, let’s take a short timeout to consider some numbers:n Millennials now outnumber Baby Boomers.

n They will comprise 40% of the U.S. workforce by 2020—that’s just four years away.

n Currently, 41% of the U.S. population is younger than 30.

The crux of the matter is this: the more than 70 million Millennials born between the late 1970s and early 1990s (es-

timates put the size of the entire generation at more than 90 million) are already a huge factor in our economy--and your future mortgage-lending success. Their place in your organiza-tion is only going to become more important with each passing year, month and day. To thrive—no, simply to survive—credit union mortgage lenders must find ways to appeal to them and bring their talents into the fold.

Now—before someone else does.The stakes are high. As the brain drain of mortgage lend-

ing employees accelerates over the next few years, Millennials will be making choices on the best places to work (as well as the best financial institutions to handle their money, loans and investments). And let’s be honest: would you want to work at a place where you wouldn’t want to put your money?

As the clock ticks and the window of opportunity to hire and train those mortgage professionals shrinks, however, there are a number of indications that credit unions are fail-ing to attract enough interest from the generation that will determine future success.

According to the Social Security Administration, about 10,000 Baby Boomers now retire every day. That works out to a 4-million-a-year employee brain drain for the United States. To replace the value of those workers, you must be prepared to hire the next generation of mortgage-loan workers at your credit union.

No doubt you’ve heard lots of stories about Millennials—the newspapers, airwaves and online world are filled with char-acterizations of them. Much has been made of this group, the first to be born into a post-Internet world where instantaneous communications have changed how information is shared.

Smartphones. Texting. Twitter. Mobile apps. And more. To succeed in recruiting these young employees you must

understand who they are and what they want. Two important characteristic that have been consistently reported about Mil-lennials are their desire to be part of a “community” and their belief in seeking a positive social impact.

15 35 50 7065605545403020 25

5 M

4 M

3 M

2 M

1 M

0

92 MMILLENNIALS

61 MGEN X

77 MBOOMERS

FIGURE 1 A LARGER COHORT

The Millennial generation is the biggest in

US history—even bigger than the

Baby Boom.

Age in 2015

Population

Source: US Census Bureau



In fact, a 2014 Deloitte survey found that 63% of Millenni-als give to charities and 43% are active volunteers or member of community organizations.

First, you must differentiate yourself as a non-profit credit union—Millennials’ desire to identify with causes and commu-nities gives you the opportunity to differentiate credit unions as non-profit communities, owned by members. This credit union difference can resonate with Millennials, who came of age during the 2008 financial meltdown led by Big Banks be-holden to stockholders.

The credit union difference is a starting point, but you must also demonstrate that you possess an inviting work environment for your Millennial employees.

ATTRACTING YOUNG WORKERSAt last fall’s ACUMA Conference, generational expert Han-

nah Ubl engaged a general-session crowd with ideas about recruiting and retaining Millennial employees. Ubl, herself a Millennial, offered some great observations and recommenda-tions. (See accompanying article, “Recruiting Millennial Em-ployees” on page 45)

Ubl also put the audience of nearly 400 mortgage lending leaders on the spot when she asked for a show of hands from Millennials. As heads turned and people searched the crowd for a response, only a couple of hands were raised. It was a stark reminder of the work that needs to be done to recruit talented young employees.

In her conference remarks, Ubl described Millennial attri-butes relating to the workplace:n Millennials want to make a difference in the world.

n Their ideal work environment as “relatable,” “authentic” and “accessible.”

n They want to have flexibility to achieve work results.

n They would rather spend money on a life experience than on a possession.

n And keeping in mind these attributes, Millennials talk about potential employers and spend time researching them online.

Ubl’s remarks, explored in more detail in the sidebar “Re-cruiting Millennial Employees” on page 45, offer a great base point to review how your mortgage-lending department works to recruit and hire employees, and more importantly, how you can continue to engage and encourage them through a welcom-ing culture that values and rewards good work.

Culture is extremely important to Millennial workers. Build one that emphasizes inclusiveness and helps them feel part of a community that makes a difference, such as charity events (You probably already have some.) or recognitions that include a donation to a worthy cause.

Take advantage of the skills and insights Millennials bring to the workplace by empowering them to participate and pro-vide feedback channels. Their ideas can help you build better processes and offer better products and services to members.

Give them flexibility, too. Millennials are results-oriented. Tell them what you need, and they’ll figure out the best way to get there. Offer them options for the workday. If 9-to-5 doesn’t work for someone, maybe 11-to-7 would. Explore work-at-home options for a regularly scheduled or occasional time. Think about how these options can help your business plan.

In the hiring process, look for diversity. Make sure you are thinking ahead to the kinds of members who will be seeking

FIGURE 2 THE FIRST DIGITAL NATIVES

Millennials have grown up with

the internet and smartphones

in an always-on digital world.

Source: Prosper Insights & Analytics for the Media Behavior and Influence Study

Millennials want to have flexibility to achieve work

results. They would rather spend money on a life experience than on a

possession. --Hannah Ubl



loans. Your recruiting strategy should attempt to in-clude differences in age, ethnicity and experience.

Ask yourself these questions, keeping in mind how they align with Millennials’ values: What is our mortgage-lending mission and vision? What do we tell potential employees about careers in our depart-ment, and what do we value in an employee? How does our website portray our department (and the credit union)?

The changes you make to build a culture that accepts Millennials and provides a work environ-ment that allows them to be happy and “make a dif-ference” in the world will also help you to become more successful.

The bottom line is that you must have an appe-tite to review your operation and the will to make some changes—and soon, while the clock is still tick-ing. If you don’t, you’ll be setting yourself up to fail.

ATTRACTING MILLENNIAL MEMBERSRecruiting new members goes hand-in-hand with

attracting and retaining new employees. It speaks to your culture and purpose—that sense of community and “making a difference” in people’s lives.

The best opportunity to recruit new members is when they are young and looking to build their lives—open a checking account, apply for a car loan, then look to purchase a home.

In the Filene report, What Millennials Want: The Future of Millennials in the Credit Union System, au-thor Andrew Turner notes that credit unions have struggled to capture the hearts and minds of those young Millennials over the last decade.

“After all, the financial meltdown of 2008 should have been the turning point for credit unions to overtake banks as the primary financial institution

SIDEBAR RECRUITING MILLENNIAL MEMBERS

STRATEGIES TO ATTRACT MILLENNIAL MEMBERSThe Filene report, What Millennials Want: The Future of Millennials in the Credit

Union System, by Andrew Turner suggests some strategies for credit unions to consider to recruit Millennial members.

TECHNOLOGY ISN’T ENOUGH TO IMPRESS.Going mobile is effectively meaningless as a differentiator because everyone

should be—and soon will be—doing it. Given that the cell phone is one of the fastest-spreading technologies in history, defining Millennials as the “mobile generation” is shortsighted. I doesn’t define just them; it defines us all.

SOCIAL MEDIA IS CRUCIAL FOR ENGAGEMENT.Social media can’t be a halfhearted effort or something that doesn’t spring from

the authentic nature of the organization. Credit unions that have had success with social media use it as a natural extension of their work, not as a pure marketing effort.

FOCUSING ON PRICE WILL COST YOU THE GAME.Let’s stipulate that lower prices and fair treatment are critical. Credit unions must

recognize that these are absolutely essential to recruitment and retention of Millennials. But that doesn’t mean price and fair treatment are the best differentiators when trying to recruit Millennials. If honesty and fair treatment are credit unions’ only calling card, then an honest, inexpensive bank can eat their lunch. Put another way, credit unions have to be effective at showing that a credit union is something more than an inexpen-sive and fair bank, or they will be unable to compete with such institutions.

In summary, credit unions that capture Millennials and hold them for the long term are those that spend time and effort to deeply empathize with the problems, challenges and opportunities that face them, and find ways to offer solutions that only a credit union could. Offering products like small-balance, low-transaction-cost savings accounts, preloaded debit cards and credit-builder loans is a good way to start. In the end, banks can never be credit unions—and it’s the system’s challenge to make that a living reality for today’s Millennials.

FIGURE 3 SOCIAL AND CONNECTED

The online world, and social media

in particular, have given the Millennials a platform to

reach the world. Source: Prosper Insights & Analytics for the Media Behavior and Influence Study,



of choice for young adults,” says Turner, a lecturer at the Uni-versity of Wisconsin Law School. But that has not happened.

“While the meltdown was complex with many facets and contributing factors, in the popular reckoning, the cause of the collapse could probably be summed up by a single word—banks,” Turner says.

“And yet the flood of new members has never really hap-pened,” he continues, noting that as far back as late 2011 the Credit Union Times warned that “the window of opportunity created by the financial crisis and distrust for banks is closing on credit unions …”

Even though Bank Transfer Day and similar events have encouraged movement away from Big Banks, Turner says, it would be hard to argue that the fundamental market for fi-nancial services has shifted away from for-profit banks toward credit unions.

Just being “not a bank” is not enough, Turner says. Credit unions that succeed in attracting Millennials, he says, “will be those that mesh with Millennials’ lives, thoughts and expecta-tions, designing products and services that respond to their worldview, their experiences and the unique pressures they face.” (See sidebar, “Recruiting Millennial Members” on page 43)

But, as Turner says, that won’t be enough to attract new members. As with potential employees, credit unions seeking Millennial members must differentiate themselves by stress-ing their cooperative, member-owned mission and the strong sense of community it brings, and then offer appropriate products and services to meet their needs in a way banks and other financial institutions cannot. Examples often cited as Millennial-friendly include fixed-rate and adjustable-rate first mortgages, mobile apps for bill payments, use of social media for member communications and embracing diversity.

In a 2014-15 Google Consumer Survey cited by the Filene report, Millennials were asked, “Why don’t you use a credit union instead of a bank?” n More than one-third (34.4%) said they didn’t know much

about credit unions.

n And almost another one-third either didn’t want to bother (18.5%) or said credit unions were inconvenient (13.0%).

n Only slightly more than one-fourth (27.2%) said they do use credit unions.

These numbers clearly show that credit unions must do a better job in getting the word out about the credit union differ-ence. Meanwhile, the clock keeps ticking.

Filene reports that one in four Millennials are looking for their first checking account, and three-quarters of those are shopping for other banking products, such as first mortgages and auto loans.

However, that window of opportunity closes quickly. Ac-cording to a report by Mintel, only 56% of 18-to-24-year olds own any banking product, but 70% of those ages 25-29 do. Despite the abundance of opportunity to recruit Millennials, the 18-to-24 demographic makes up only 9% of credit union membership.

And although one-third of Americans are credit union members, older members are more likely to use them: 38% of Baby Boomers, 33% of Gen Xers and only 26% of Millennials, according to a 2014 Harris Poll.

Perhaps credit unions are showing their age. Time grows short to recruit Millennials—for the mortgage

department and as members that would seek home loans. Credit unions that fail to act on the brain drain within their organizations and the decline in numbers of young members may wind up sitting on the sidelines as others take their place.

Tom Burton is a freelance writer and editor who worked for 10 years in the credit union industry. Prior to that, he was an editor and manager at a daily newspaper.

FIGURE 3 DIFFERENT PRIORITIES

With less to spend, they’re

putting off commitments like marriage

and home ownership.

Source: Pew Research Center, Current Population Survey

% of adults 18-31 married and living in their own household

To learn more about Filene, which published Andrew Turn-er’s report, What Millennials Want: The Future of Millennials in the Credit Union System, visit the website at filene.org.



SIDEBAR RECRUITING MILLENNIAL EMPLOYEES

Awhile back I wrote about the need to recruit the next generation of loan originators. I profiled four new originators at Wright-Patt Credit Union and encouraged credit unions to think about how to attract Millennials as loan originators.

In September 2015, I attended the annual ACUMA conference (a must-attend event for credit union mortgage executives) and heard Hannah Ubl speak. Hannah is a generational expert and works for a company called Bridgeworks (www.generations.com).

From the Bridgeworks website, here’s a quote about who they are and what they do:

“There’s one phrase that defines every member of our team: Gen-erational Junkies. And we don’t toss that phrase around lightly. Every Bridgeworks employee is a research hound and generational expert in his/her own right. We eat, breathe, and live generations. Seriously. Our friends beg us to stop talking about it during happy hour.”

At ACUMA Hannah certainly lived up to that description. She talked about how to recruit Millennials and perhaps more impor-tantly, how to retain them as employees. What did I learn and what does it mean for credit unions wanting to be member-friendly?

There are lots of stereotypes about Millennials—some good, some not so good. Here are the key take-aways from Hannah’s presentation.

MILLENNIALS ARE MOTIVATED DIFFERENTLY THAN OTHER GENERATIONS.

They want to know how they can make a difference in the world. So be sure to connect the dots for them about how helping your members with home ownership can have a positive impact on your community. It’s a fact that home ownership promotes neighborhood growth and stability. And home ownership helps Americans create a source of future wealth. Share with Millennials how they can help make this a reality.

MILLENNIALS VALUE THE WORKPLACE ENVIRONMENT AND WORKPLACE RELATIONSHIPS.

The top three words they use to describe the ideal work environ-ment are relatable, authentic and accessible. They want to be able to personally relate to the work they do. They want the work to be real and authentic, and they want accessibility to others in the workplace. They want work/life integration (not work/life balance). This means we need to make sure they understand the higher purpose of mort-gage lending at your credit union, and that they are able to create networking opportunities and make friends.

MILLENNIALS DO NOT EQUATE WORKING LONG HOURS AND STICK-ING TO A SCHEDULE AS HARD WORK.

They want to know what results are needed and be given flexibil-ity to achieve them. If you are going to hire Millennials as loan origi-

nators, you must first decide how you can of-fer them flexibility to achieve this. And you must remember that they want their work to integrate into their life.

MILLENNIALS ARE AN EXPERIENCE-BASED GENERATION. Hanna noted that a recent survey showed 74% of Millennials

would rather spend money on an experience than a physical thing. They want to enrich their lives. Questions you must answer include: How can mortgage lending allow them to do this? How can you structure their workday and work life to allow them to experience more of life? It’s certainly a culture change for mortgage lenders, but it’s necessary to attract Millennials.

MILLENNIALS DO THEIR RESEARCH ON EMPLOYERS.Hannah also talked about how Millennials research potential

employers. They spend time online researching what others say about the employer. They look at the employer’s website to see how it speaks to them in terms of the workplace environment and allow-ing them to satisfy their motivations of changing the world. So make sure the employee/career section of your website tells a story that is relevant to Millennials rather than simply lists the jobs available.

Bethpage Credit Union has done an outstanding job of this on their website. Check out the great video Bethpage created to tell its story (https://www.bethpagefcu.com/about-us/careers/working-at-bethpage.aspx). The introduction to the video, which features a vari-ety of Bethpage employees talking about the organization, includes this millennial-friendly snippet:

“… If you want to work in an organization where the desire to provide world-class service is shared by all your colleagues, and where doing the right thing is more important than cor-porate profits, then we encourage you to consider a career at Bethpage. … We are as committed to our employees as they are to our members.”

Attracting Millennials to your credit union and to mortgage lend-ing won’t be easy. It will mean many changes in how we think about our employees, especially what we expect from them, as well as how we recruit them. But it’s necessary if we are going to be successful into the future.

Tim Mislansky is the Senior Vice President and Chief Lending Of-ficer of Dayton, Ohio-based Wright-Patt Credit Union, Inc., and Presi-dent of its wholly-owned CUSO, myCUmortgage, LLC. This article has been adapted with permission from Mislansky’s online blog. Sign up to follow his blog at mortgagesarememberlicious.com.

UNDERSTANDING THIS YOUNG GENERATION HELPS CREATE A WELCOMING WORKPLACEBy Tim Mislansky

ANALYZER

the credit union company


THE TOP 300

As credit unions look in their rear-view mirrors, they can see that 2015 mortgage loan originations will top 2014 totals. This is news to cheer. It shows hard work and determination have paid off.

Looking ahead to 2016, the question is: Have credit union originations peaked, or can more hard work and determina-tion (and help from a recovering economy) keep them climb-ing higher?

More importantly, what will it take to keep growing those loans?

First, consider that the Mortgage Bankers Association pre-dicts that by midyear refinance loans will make up less than

30% of total originations. That means purchase loans are in the spotlight: They will be the route to holding—and perhaps increasing—market share and loan volume.

With that route in mind credit unions have the opportuni-ty to establish strategies and make plans for the New Year that will keep them relevant to members and attractive to Realtors who can partner with them in their local markets.

That’s a big challenge. It means taking stock of your busi-ness, assessing effectiveness and brainstorming ideas to meet the challenges of the marketplace. Look for ways your products and services can meet and exceed expectations for existing (and new) members.

Opportunity Comes with Challenges in 2016

TOP 300 FIRST MORTGAGE GRANTING CU AS OF SEPTEMBER 15, 2015 $ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 1 VA Navy $9,688,077,585 38,117 $23,827,117,287 $3,549,188,229 $71,967,667,797

2 VA Pentagon $3,139,108,302 8,331 $11,438,980,756 $796,708,270 $19,223,138,716

3 NC State Employees’ $2,227,321,893 14,648 $13,960,161,894 $0 $31,162,020,508

4 CA Kinecta $1,978,515,860 4,854 $1,799,975,784 $1,524,879,865 $3,751,987,558

5 CA First Tech $1,606,475,564 4,522 $3,359,053,455 $575,760,731 $8,335,581,297

6 MI Lake Michigan $1,592,578,607 9,742 $2,269,905,378 $1,285,772,020 $3,920,841,825

7 NY Bethpage $1,274,505,126 3,823 $2,452,913,575 $563,190,056 $6,186,882,226

8 WA BECU $1,209,667,956 4,272 $3,803,773,142 $256,728,209 $13,878,323,252

9 TX Security Service $997,349,355 4,844 $1,663,723,768 $264,718,189 $9,052,442,285

10 AK Alaska USA $941,532,300 3,728 $684,370,394 $886,614,065 $6,309,166,775

11 CA San Diego County $851,037,600 2,359 $3,237,946,807 $118,467,243 $7,094,186,997

12 CA Logix $842,600,781 2,182 $2,189,650,482 $227,845,513 $4,180,508,157

13 CA SchoolsFirst $804,404,986 2,662 $2,502,327,972 $254,505,336 $11,438,769,717

TOP 300 FIRST MORTGAGE GRANTING CU MARKET SHARE AS OF SEPTEMBER 15, 2015 $ Originated # Originated $ Outstanding 1st Mortgages 1st Mortgages 1st Mortgages $ Sold (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets Top 300 1st Mortgages Originated CUs 75,493,571,001 344,359 221,985,943,155 30,148,971,051 688,603,046,251

All Originating CUs (3,328 CUs)* 96,002,327,635 508,971 318,664,230,568 37,103,333,711 1,149,346,061,953

Top 300 Share 78.6 68 69.7 81 59.9 *CUs who granted $10,000 or more 01/15 - 09/15


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 14 CO Elevations $786,900,474 2,777 $604,333,284 $577,486,056 $1,563,584,295

15 UT America First $735,133,288 6,096 $835,166,573 $440,965,667 $7,002,583,992

16 ID Idaho Central $695,424,774 4,189 $743,081,912 $498,726,706 $2,267,420,150

17 OR OnPoint Community $667,606,399 4,682 $1,075,772,103 $330,737,584 $3,838,024,235

18 WI Summit $616,325,372 3,679 $1,021,200,429 $270,328,524 $2,314,532,661

19 MA Digital $600,281,689 1,890 $2,237,024,836 $167,307,376 $6,519,513,295

20 CA The Golden 1 $587,187,278 2,499 $1,922,257,315 $39,622,782 $9,508,199,852

21 CA Star One $528,425,088 1,294 $2,600,329,656 $0 $7,760,198,043

22 IL BCU $526,669,807 2,318 $936,433,467 $341,441,403 $2,255,227,967

23 WI Landmark $524,530,484 3,486 $863,962,173 $375,142,121 $2,844,837,821

24 UT Mountain America $523,934,322 4,168 $1,583,290,038 $264,373,162 $4,823,680,120

25 CO Ent $516,535,327 2,591 $1,762,543,345 $51,278,817 $4,210,491,845

26 TX Randolph-Brooks $507,763,078 3,063 $2,015,229,156 $25,235,964 $6,665,438,060

27 CA Patelco $495,081,268 1,261 $1,623,657,683 $165,938,450 $4,579,181,306

28 WI Community First $494,201,049 3,241 $1,402,432,872 $22,389,450 $2,208,629,836

29 WI University Of Wisconsin $489,124,660 2,604 $385,899,774 $365,013,000 $2,011,360,066

30 MO CommunityAmerica $462,748,796 2,471 $577,507,625 $399,311,809 $2,127,927,016

31 TX University $457,572,570 1,787 $698,034,269 $345,037,713 $1,926,974,175

32 DC Bank-Fund Staff $454,917,894 922 $1,871,887,140 $29,943,067 $4,066,214,702

33 FL Suncoast $410,886,737 2,782 $1,977,962,376 $4,998,622 $6,627,125,361

34 AZ Desert Schools $399,166,767 2,289 $552,969,733 $256,259,972 $3,741,414,265

35 CA Provident $397,576,604 920 $839,646,298 $201,847,235 $2,115,578,034

36 OH Wright-Patt $391,937,508 3,153 $511,070,393 $210,752,092 $3,141,082,530

37 IL CEFCU $381,529,205 2,050 $2,236,955,553 $0 $5,174,819,725

38 NY State Employees $377,557,073 2,396 $726,177,089 $235,150,988 $3,002,250,313

39 NY United Nations $375,490,542 863 $1,253,238,290 $43,411,681 $4,297,007,910

40 CA Mission $373,513,637 1,025 $844,592,228 $151,651,858 $2,797,949,388

41 MN Wings Financial $362,923,710 1,344 $900,001,202 $35,960,548 $4,192,089,211

42 CA Chevron $352,814,861 1,050 $1,878,991,009 $0 $2,696,182,340

43 IL Alliant $351,741,175 833 $3,135,779,762 $145,944,717 $8,463,784,328

44 TN Eastman $347,120,586 2,488 $1,625,827,944 $182,898 $3,225,036,530

45 CA Redwood $336,694,400 1,025 $1,088,430,035 $146,653,250 $2,702,889,934

46 WI Royal $330,333,009 2,005 $717,583,894 $194,175,937 $1,648,265,062

47 IA University Of Iowa Community $328,947,166 1,793 $1,428,877,753 $394,365,670 $3,116,979,243

48 TX TDECU $311,399,555 1,898 $743,427,128 $114,584,169 $2,703,760,660

49 VT New England $302,634,998 1,499 $529,971,010 $168,887,618 $1,084,970,681

50 FL VyStar $299,582,490 2,127 $1,930,396,821 $39,788,863 $5,597,827,037

51 VA Northwest $292,382,719 1,007 $550,401,363 $202,472,873 $2,967,858,506

52 GA Delta Community $291,900,422 1,461 $1,548,179,578 $18,233,508 $4,829,687,878

53 CA Premier America $290,302,865 319 $1,137,185,130 $18,335,800 $2,123,587,994

54 IA Veridian $289,816,030 1,764 $797,830,567 $124,846,582 $2,764,223,380


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 55 NC Coastal $286,069,367 1,164 $757,891,182 $169,988,654 $2,555,294,886

56 CO Bellco $284,929,327 949 $885,016,118 $71,996,848 $3,415,346,354

57 MD SECU of Maryland $276,034,864 1,206 $1,151,365,447 $83,637,000 $2,923,315,047

58 CA SAFE $269,365,142 1,013 $635,357,597 $97,088,649 $2,295,491,716

59 NY Teachers $269,058,150 1,010 $1,157,453,409 $91,151,736 $5,186,292,579

60 CA Stanford $267,675,686 418 $788,560,904 $53,731,007 $1,821,148,446

61 NC Local Government $262,353,144 1,937 $409,185,262 $177,705,449 $1,549,125,464

62 NY CAP COM $261,271,177 1,879 $632,417,109 $122,713,148 $1,226,505,671

63 CA Financial Partners $260,503,109 643 $434,353,081 $143,035,735 $1,058,549,398

64 UT Utah Community $256,859,221 1,383 $210,577,084 $187,471,627 $1,021,629,217

65 CA Technology $255,821,217 379 $788,416,110 $1,356,138 $1,992,618,549

66 CA Wescom $253,572,863 800 $864,220,037 $148,665,364 $3,238,792,671

67 MN TruStone Financial $248,494,446 1,498 $331,386,340 $194,999,788 $1,033,816,109

68 UT Goldenwest $248,442,178 1,131 $322,932,792 $167,672,330 $1,116,488,681

69 MN Affinity Plus $245,336,443 1,494 $424,544,409 $179,571,326 $1,727,177,281

70 WI Altra $242,932,502 1,544 $424,573,694 $135,375,226 $1,114,446,386

71 FL GTE Financial $241,834,521 1,284 $377,431,201 $199,346,063 $1,734,212,997

72 AZ Arizona State $239,597,376 1,162 $559,721,466 $125,659,550 $1,727,005,121

73 NV One Nevada $238,570,083 1,166 $154,348,210 $219,801,643 $749,169,233

74 NY Hudson Valley $238,511,754 1,158 $704,427,535 $142,314,383 $4,239,272,104

75 TX American Airlines $236,973,728 1,173 $1,845,861,296 $0 $6,197,960,940

76 VA Apple $233,901,542 652 $770,158,856 $60,307,152 $2,054,428,831

77 CA California Coast $228,589,246 705 $646,327,246 $62,638,936 $1,947,563,562

78 CA NuVision $228,350,986 655 $504,786,449 $117,518,522 $1,364,308,709

79 PA Citadel $225,405,918 809 $1,046,944,985 $29,925,630 $2,311,370,288

80 RI Pawtucket $218,719,856 1,248 $1,092,707,671 $20,351,752 $1,746,994,401

81 OR Advantis $215,241,282 801 $347,652,222 $167,810,022 $1,206,719,139

82 CA California $213,772,727 518 $499,253,293 $73,696,088 $1,477,482,989

83 MI DFCU Financial $207,662,959 1,333 $632,010,262 $148,790,721 $3,903,703,272

84 IN Forum $205,503,149 1,019 $248,923,739 $161,079,992 $1,095,499,497

85 TX Advancial $203,471,023 703 $429,884,680 $116,866,123 $1,233,240,194

86 CA Partners $201,609,076 681 $427,035,371 $102,821,528 $1,339,435,177

87 WA Whatcom Educational $199,346,199 842 $548,278,435 $110,262,915 $1,173,758,594

88 NJ Affinity $198,524,735 818 $1,303,936,278 $319,525 $2,334,804,075

89 RI Navigant $197,756,849 839 $888,865,393 $34,278,781 $1,532,529,686

90 PA Members 1st $197,596,387 1,070 $578,759,518 $119,700,476 $2,925,371,244

91 FL Fairwinds $192,942,740 1,107 $637,466,871 $11,278,433 $1,899,431,742

92 MI Michigan State University $187,285,351 1,142 $895,724,571 $1,884,600 $2,941,701,573

93 IN Purdue $186,576,557 870 $424,208,015 $75,196,542 $954,237,557

94 NY ESL $184,761,598 1,138 $391,091,021 $124,001,074 $5,542,388,084

95 CA Travis $184,529,381 753 $429,117,845 $87,155,195 $2,475,977,179


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 96 PA Pennsylvania State Employees $181,271,807 1,849 $790,596,173 $0 $4,326,603,424

97 IN Teachers $181,076,340 1,116 $913,599,090 $2,793,893 $2,781,006,420

98 VA Virginia $180,331,965 1,037 $602,772,829 $56,116,201 $2,809,898,561

99 WA WSECU $179,952,162 873 $494,470,815 $105,924,446 $2,331,518,342

100 NY Visions $179,045,302 670 $1,237,788,980 $11,126,400 $3,457,502,642

101 MD NASA $177,162,197 478 $471,355,669 $88,558,162 $1,663,894,754

102 CA Western $176,031,207 453 $677,694,098 $14,515,020 $2,131,795,187

103 CA Firefighters First $175,451,970 478 $598,807,531 $27,205,587 $1,051,710,352

104 MA Metro $169,922,600 519 $481,840,214 $110,112,384 $1,462,891,922

105 MD Tower $169,205,819 670 $422,842,905 $118,649,493 $2,755,247,048

106 CA San Francisco Fire $167,494,710 360 $436,491,279 $54,739,800 $1,084,921,264

107 OK Truity $165,430,370 817 $190,342,483 $112,428,920 $719,024,895

108 IN Elements Financial $165,218,782 841 $393,457,860 $63,803,402 $1,115,540,776

109 NM Nusenda $163,545,391 656 $450,347,205 $61,001,845 $1,650,711,698

110 WA Spokane Teachers $163,209,097 882 $873,789,636 $9,968,415 $2,142,130,691

111 CA KeyPoint $162,651,689 225 $434,285,940 $71,499,658 $1,024,241,286

112 OR Unitus Community $159,610,742 819 $233,289,890 $100,259,620 $971,815,318

113 WI Educators $159,034,069 1,346 $695,273,878 $8,312,044 $1,563,306,568

114 CA Evangelical Christian $158,926,545 47 $556,119,428 $214,695,406 $908,071,838

115 SC South Carolina $157,107,802 755 $448,295,565 $29,417,356 $1,387,679,280

116 IA Dupaco Community $157,037,873 1,193 $296,973,563 $98,343,635 $1,291,810,403

117 MI United $156,657,347 855 $778,795,878 $44,285,631 $1,985,015,439

118 NY Nassau Educators $155,232,305 396 $620,982,143 $49,295,261 $2,318,501,279

119 WI Covantage $154,324,047 1,230 $563,693,556 $26,438,105 $1,224,295,328

120 MO First Community $152,245,760 1,013 $387,750,364 $57,040,897 $2,084,825,141

121 MA Jeanne D’Arc $148,538,527 440 $662,339,988 $92,322,470 $1,154,623,657

122 CA American First $148,177,822 371 $207,001,962 $46,729,444 $545,964,418

123 FL Space Coast $148,085,291 790 $804,134,318 $47,790,809 $3,471,288,664

124 IA Collins Community $145,616,467 966 $350,668,555 $70,333,884 $873,126,871

125 WI Westconsin $143,910,453 1,119 $378,169,889 $114,384,098 $978,216,341

126 IN Evansville Teachers $141,399,568 1,165 $345,168,228 $61,559,502 $1,157,867,141

127 CO Westerra $140,608,100 453 $363,645,144 $107,759,333 $1,325,979,885

128 ND Town and Country $139,967,314 710 $145,572,627 $108,510,833 $372,519,479

129 IL Great Lakes $139,465,053 367 $181,329,700 $48,000,763 $690,325,995

130 MN Central Minnesota $139,400,904 844 $363,129,552 $62,624,375 $894,618,418

131 TX GECU $138,207,356 1,352 $420,323,008 $80,640,443 $2,218,659,894

132 CA Xceed Financial $137,793,663 383 $357,559,173 $105,871,953 $907,948,671

133 WI Marine $137,718,481 1,462 $239,214,641 $71,171,656 $578,942,030

134 CT American Eagle Financial $133,728,565 627 $463,141,721 $54,803,799 $1,398,772,223

135 WI Capital $132,841,005 1,062 $477,987,766 $26,278,712 $1,129,868,518

136 TN ORNL $132,295,336 872 $506,796,189 $54,024,600 $1,690,879,530

© 2016 BOK Financial Correspondent Mortgage Services, a division of BOKF, NA. Member FDIC. Equal Housing Lender

855.890.1485 | [email protected] | www.bokfinancial.com/cms

Long Live A Great Partnership.As a proven industry leader operating multiple lines of business and strengthened by $31 billion in assets, BOK Financial delivers the one thing all customers seek: confidence in their financial partner.

BOK Financial Correspondent Mortgage Services offers a full suite of mortgage products and services especially for Credit Unions. We exemplify our dedication to the success of our clients by providing solutions that help them to retain and continue to meet the needs of their own members.

Advantages to partnering with us:

• Non Solicitation Agreement

• Focused Strategy on Delivering Solutions to Credit Unions

• Valued Partnership

• Reverse Referrals

• Limited Overlays

• Delegated and Non-Delegated Underwriting

• Inside Account Management Team

We have the experience and capabilities you want to satisfy the needs of your members.Contact us to learn how we can partner today.

© 2016 BOK Financial Correspondent Mortgage Services, a division of BOKF, NA. Member FDIC. Equal Housing Lender

855.890.1485 | [email protected] | www.bokfinancial.com/cms

Long Live A Great Partnership.As a proven industry leader operating multiple lines of business and strengthened by $31 billion in assets, BOK Financial delivers the one thing all customers seek: confidence in their financial partner.

BOK Financial Correspondent Mortgage Services offers a full suite of mortgage products and services especially for Credit Unions. We exemplify our dedication to the success of our clients by providing solutions that help them to retain and continue to meet the needs of their own members.

Advantages to partnering with us:

• Non Solicitation Agreement

• Focused Strategy on Delivering Solutions to Credit Unions

• Valued Partnership

• Reverse Referrals

• Limited Overlays

• Delegated and Non-Delegated Underwriting

• Inside Account Management Team

We have the experience and capabilities you want to satisfy the needs of your members.Contact us to learn how we can partner today.


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 137 IN Indiana Members $132,021,960 731 $443,791,756 $23,808,380 $1,530,156,507

138 PA TruMark Financial $131,879,485 527 $504,347,684 $78,040,224 $1,648,657,309

139 WI Fox Communities $130,540,576 1,169 $671,750,028 $14,180,418 $1,109,953,680

140 NH St. Mary’s Bank $129,789,625 672 $286,326,613 $78,355,867 $880,130,075

141 CA Orange County’s $129,055,741 449 $501,337,664 $138,940,579 $1,299,593,696

142 CO Public Service $128,842,475 462 $184,498,065 $71,046,344 $1,590,254,998

143 IN Beacon $128,545,116 415 $630,044,049 $0 $1,152,736,455

144 CA Meriwest $127,588,344 175 $393,824,311 $100,290,425 $1,156,962,470

145 PA American Heritage $126,102,104 485 $414,859,578 $108,609,785 $1,551,295,374

146 PA Police And Fire $125,415,224 838 $1,352,109,656 $80,093,349 $4,310,966,429

147 WA Numerica $125,003,061 684 $392,857,838 $75,612,565 $1,538,255,996

148 NY Sunmark $123,437,601 634 $169,569,670 $65,050,472 $473,499,188

149 TX Navy Army Community $119,764,763 979 $823,082,340 $0 $2,317,461,581

150 WA Columbia $118,548,256 539 $350,029,965 $45,859,240 $1,102,954,503

151 NJ Polish & Slavic $117,322,027 465 $765,737,221 $0 $1,647,154,318

152 CA North Island $116,330,849 215 $445,939,483 $21,695,900 $1,179,670,545

153 MO Anheuser-Busch Employees $116,250,252 608 $400,305,798 $52,716,798 $1,532,674,955

154 CT Charter Oak $115,957,697 654 $522,811,390 $21,938,079 $913,974,132

155 MI Community Financial $114,608,451 601 $273,505,012 $60,264,053 $665,428,195

156 SC Founders $114,437,567 2,246 $658,596,806 $0 $1,823,270,393

157 VT Vermont State Employees $114,258,927 707 $312,347,083 $42,171,177 $680,887,408

158 IL Deere Employees $113,831,419 664 $358,888,748 $33,871,000 $715,519,425

159 MT Whitefish $112,654,695 599 $578,086,508 $0 $1,291,111,995

160 AL Redstone $112,469,605 856 $336,562,844 $95,918,954 $3,880,963,577

161 CO Credit Union Of Colorado $111,264,886 625 $274,152,456 $43,644,339 $1,269,088,048

162 NC Truliant $110,372,434 715 $465,339,258 $35,510,734 $1,849,724,902

163 CA USE $110,004,476 381 $264,683,402 $62,000,328 $816,296,264

164 WA Gesa $109,682,971 576 $289,630,591 $46,074,816 $1,536,347,709

165 VA Langley $109,634,718 678 $335,274,716 $28,720,348 $2,063,050,357

166 MA Rockland $109,595,584 316 $404,465,524 $33,891,780 $1,413,779,125

167 FL Grow Financial $109,468,019 632 $502,271,463 $83,036,616 $2,118,761,423

168 UT Deseret First $108,744,473 513 $129,336,199 $72,937,037 $494,443,437

169 KY L & N $108,513,868 741 $440,354,769 $8,364,350 $959,917,819

170 IN 3Rivers $108,237,000 652 $241,841,746 $14,151,775 $787,731,860

171 NH Service $108,133,202 491 $532,207,257 $0 $2,742,900,347

172 AZ Vantage West $107,535,179 330 $330,711,999 $7,826,147 $1,532,863,591

173 NM Sandia Laboratory $106,046,053 367 $650,937,240 $8,631,224 $2,170,221,553

174 OH General Electric $104,567,990 467 $429,426,487 $3,781,200 $2,132,758,086

175 GA Georgia’s Own $104,404,539 528 $458,537,928 $21,430,096 $1,881,479,966

176 NY Self Reliance New York $103,780,750 189 $695,749,332 $0 $1,146,951,166

177 FL Campus USA $103,628,603 802 $376,099,913 $155,800 $1,363,511,497


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 178 OH Superior $103,264,467 962 $205,201,831 $83,220,900 $519,050,760

179 NY Corning $100,929,051 702 $274,025,859 $37,544,136 $1,136,295,878

180 PA Franklin Mint $100,742,077 418 $245,178,848 $57,779,089 $885,666,517

181 CA Bay $99,191,050 340 $155,794,034 $70,414,790 $732,701,827

182 NY Empower $98,736,411 825 $229,568,649 $73,287,775 $1,353,378,334

183 MA Harvard University Employees $98,477,572 284 $236,009,290 $32,073,240 $503,278,434

184 MA Workers’ $98,029,814 380 $525,250,657 $24,633,051 $1,270,465,410

185 TN Ascend $97,746,709 568 $544,194,567 $0 $1,789,338,947

186 UT University First $97,694,186 589 $120,400,256 $54,966,464 $755,712,334

187 NE Centris $97,674,641 674 $189,374,626 $55,424,091 $572,880,557

188 WA TwinStar $97,133,570 530 $132,547,205 $77,490,602 $1,007,291,782

189 GA Robins $96,688,800 636 $332,889,349 $25,322,098 $2,066,465,453

190 NY Quorum $96,299,608 272 $356,980,595 $45,405,427 $933,249,501

191 WA iQ $95,620,364 377 $154,301,121 $56,287,232 $798,615,213

192 TX Texans $94,619,449 584 $276,092,619 $16,150,333 $1,407,678,622

193 IN Centra $94,304,402 624 $337,055,241 $24,510,870 $1,272,026,514

194 IN Indiana University $94,269,706 501 $360,671,174 $18,942,133 $823,155,223

195 NV Silver State Schools $92,827,530 381 $326,974,703 $49,414,928 $660,663,962

196 MA Webster First $91,990,350 296 $494,649,437 $0 $821,381,715

197 GA Associated $91,957,583 620 $216,470,156 $33,922,975 $1,366,599,806

198 NY Melrose $91,400,370 99 $461,311,180 $0 $2,083,690,217

199 IN Interra $88,817,473 439 $302,518,737 $5,493,880 $759,621,370

200 WA Verity $88,514,179 396 $135,623,771 $58,210,474 $461,184,478

201 DC Congressional $88,241,545 261 $238,653,560 $31,858,534 $803,824,999

202 CA Ventura County $87,626,457 270 $173,747,090 $52,490,522 $719,193,227

203 VA Dupont Community $86,895,020 552 $460,308,486 $17,043,179 $988,323,596

204 CA First Entertainment $86,705,636 210 $366,187,475 $20,019,448 $1,221,119,376

205 SC Sharonview $86,365,098 537 $529,486,591 $499,700 $1,186,018,383

206 WA Sound $86,219,775 436 $214,202,576 $45,104,356 $1,208,153,655

207 FL Achieva $85,292,276 392 $209,203,182 $45,424,518 $1,195,238,908

208 HI Hawaii State $85,271,895 215 $215,909,272 $10,650,150 $1,385,637,053

209 NC Allegacy $84,597,099 590 $221,106,125 $53,120,874 $1,137,038,554

210 CA Educational Employees $83,911,759 530 $295,531,914 $0 $2,451,550,286

211 TN Orion $83,080,283 320 $168,980,878 $4,174,616 $574,607,441

212 OK TTCU The $83,046,757 555 $180,853,947 $46,861,453 $1,581,181,127

213 WA Salal $82,835,766 288 $129,241,202 $62,937,333 $417,688,026

214 WI Westby Co-op $82,618,761 707 $164,489,702 $22,270,755 $410,130,970

215 WI Verve, a $82,480,149 530 $383,329,693 $26,657,812 $727,397,381

216 TX First Community $82,242,681 373 $235,448,029 $6,566,893 $1,136,788,184

217 CA CoastHills $82,146,604 361 $371,207,601 $13,510,900 $879,237,791

218 IL Dupage $82,114,001 417 $15,137,930 $81,694,996 $300,622,362


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 219 MI Lake Trust $81,423,593 494 $530,695,442 $0 $1,631,280,602

220 UT Cyprus $80,394,477 358 $144,411,318 $37,460,154 $713,232,798

221 MA Direct $80,241,310 221 $165,986,870 $30,392,863 $439,184,380

222 MA Hanscom $80,093,040 316 $213,933,466 $62,157,988 $1,099,579,588

223 OK Weokie $79,677,977 402 $298,609,226 $12,466,802 $1,014,107,956

224 CA Los Angeles Police $79,665,083 285 $268,193,000 $26,733,820 $841,552,893

225 FL MidFlorida $79,139,820 357 $637,894,949 $138,113,144 $2,322,242,236

226 MN Spire $78,809,265 466 $199,453,144 $48,469,768 $801,575,612

227 MA First Citizens’ $78,272,244 311 $240,576,235 $11,782,870 $664,041,080

228 IA Community Choice $77,092,192 486 $58,683,252 $60,936,114 $433,715,565

229 NY USAlliance $77,052,625 137 $290,191,465 $7,843,163 $1,076,988,188

230 NE Liberty First $76,944,924 519 $61,711,678 $67,756,380 $205,655,994

231 OR Oregon State $76,831,462 331 $196,292,575 $37,725,765 $962,439,907

232 TX United Heritage $76,728,359 407 $304,345,344 $20,627,358 $841,001,196

233 MA St. Anne’s Of Fall River $76,612,342 339 $423,374,888 $27,562,909 $861,219,856

234 AZ TruWest $76,591,565 366 $249,027,396 $50,692,652 $903,837,716

235 NY Municipal $76,568,812 289 $622,172,345 $0 $2,215,232,661

236 FL Power Financial $76,275,171 221 $289,876,743 $0 $533,269,446

237 CO Air Academy $75,747,428 347 $151,950,229 $52,946,653 $506,358,489

238 MD National Institutes of Health $75,745,668 277 $172,585,315 $51,122,632 $552,887,496

239 TX EECU $75,586,682 457 $219,642,773 $46,076,546 $1,777,146,709

240 MI Advia $75,467,710 410 $301,388,427 $2,471,300 $1,140,215,906

241 CA Kern Schools $75,194,990 396 $374,536,024 $5,106,443 $1,322,638,635

242 CA USC $75,003,800 192 $94,752,861 $43,168,900 $422,348,842

243 OR Rogue $74,610,905 455 $204,272,103 $51,717,010 $1,044,781,644

244 WA Solarity $73,994,010 408 $199,742,417 $34,059,682 $601,877,727

245 DC IDB-IIC $73,729,594 166 $309,087,828 $0 $506,965,041

246 VA State Department $73,642,088 231 $482,066,782 $63,570,569 $1,677,926,729

247 TX Austin Telco $72,965,719 388 $307,061,939 $6,072,927 $1,334,580,351

248 NC Self-Help $72,573,698 353 $353,796,374 $0 $605,983,507

249 FL Pen Air $72,443,402 378 $208,834,849 $6,039,140 $1,278,966,289

250 IL Abbott Laboratories Employees $72,403,707 317 $190,640,803 $31,903,850 $680,221,224

251 SD Sioux Falls $72,172,488 427 $14,446,994 $69,468,099 $232,480,112

252 ID Potlatch No 1 $72,080,094 485 $74,171,135 $64,825,308 $776,526,540

253 MI Dow Chemical Employees $71,428,306 474 $378,817,144 $6,371,490 $1,446,633,477

254 MN Hiway $71,300,100 420 $367,194,295 $11,254,708 $994,285,736

255 CA Credit Union of Southern California $70,352,049 192 $291,444,189 $11,166,598 $989,887,394

256 ND First Community $69,568,492 153 $217,857,314 $22,702,381 $540,096,607

257 TN Knoxville TVA Employees $69,284,031 738 $426,559,749 $9,151,040 $1,459,494,004

258 NY CFCU Community $69,048,050 431 $408,433,532 $8,863,418 $954,907,461

259 TX Shell $68,349,228 527 $163,003,858 $22,800,834 $738,431,975


THE TOP 300

$ Originated # Originated $ Outstanding Name of 1st Mortgages 1st Mortgages 1st Mortgages $ Sold Rank Credit Union (Fixed & Adjustable) (Fixed & Adjustable) (Fixed & Adjustable) 1st Mortgages Total Assets 260 OR First Community $68,307,705 456 $225,597,542 $32,475,783 $878,434,175

261 WA Global $67,640,265 376 $74,498,700 $38,007,950 $380,848,607

262 VT Vermont $67,459,703 701 $128,242,970 $44,304,709 $450,120,083

263 MA Align $67,368,789 251 $234,857,509 $23,204,825 $563,679,563

264 WI Thrivent $66,657,736 434 $182,734,340 $48,069,000 $467,407,268

265 MA Greylock $66,607,230 399 $457,383,189 $31,823,362 $1,073,551,303

266 CA Schools Financial $66,600,197 453 $178,567,081 $28,733,317 $1,590,991,120

267 CA San Francisco $66,390,202 159 $330,852,413 $0 $974,844,640

268 PA Philadelphia $66,355,117 256 $244,538,419 $18,397,763 $939,466,484

269 NY Island $65,515,350 243 $234,501,238 $10,711,100 $1,060,129,403

270 VA University of VA Community $65,477,453 595 $115,162,870 $38,519,666 $715,040,823

271 FL IBM Southeast Employees $65,435,354 380 $242,886,099 $19,167,954 $881,258,835

272 MI Michigan Schools and Government $64,942,534 439 $483,185,155 $160,000 $1,526,782,416

273 CA Point Loma $64,805,049 149 $209,666,136 $0 $443,453,776

274 SD Black Hills $64,563,556 342 $317,748,170 $10,349,970 $1,052,287,788

275 CO Colorado $64,506,591 263 $24,527,900 $60,879,254 $138,825,290

276 IL Scott $64,356,736 458 $102,096,198 $34,277,823 $1,017,001,898

277 TX Members Choice $64,119,813 165 $204,044,033 $4,045,180 $494,214,292

278 TX Texas Tech $63,867,849 322 $20,388,570 $47,357,541 $112,106,809

279 AL APCO Employees $63,831,628 386 $430,843,570 $0 $2,583,141,459

280 WA Inspirus $63,308,111 408 $156,613,354 $0 $1,049,326,586

281 WI Kohler $63,294,962 510 $107,560,920 $40,961,753 $299,291,704

282 CA Southland $63,179,450 202 $152,804,376 $44,307,850 $578,568,194

283 WI Blackhawk Community $62,952,096 445 $137,993,560 $47,409,269 $416,026,537

284 OH KEMBA Financial $62,610,606 465 $259,887,790 $20,292,649 $980,629,386

285 TX Firstmark $62,319,348 529 $335,929,309 $0 $980,561,652

286 AL America’s First $62,252,246 533 $365,157,899 $12,405,716 $1,368,817,844

287 SC SRP $62,180,824 509 $80,288,470 $48,763,930 $713,896,824

288 MI Honor $61,782,228 488 $207,542,675 $34,331,557 $643,739,766

289 CA SF Police $61,715,112 147 $304,835,004 $15,233,094 $797,063,138

290 OR Rivermark Community $61,161,827 323 $164,033,070 $33,701,760 $694,693,972

291 AK Matanuska Valley $60,367,308 279 $159,670,162 $4,593,992 $441,446,452

292 OH Directions $60,185,977 401 $216,254,086 $49,220,066 $621,093,793

293 AL MAX $59,822,285 311 $200,108,037 $18,066,500 $1,139,440,592

294 FL Tropical Financial $59,621,391 267 $187,555,149 $49,371,775 $575,498,637

295 NY AmeriCU $59,508,215 435 $262,580,524 $35,710,509 $1,267,343,597

296 OH Seven Seventeen $59,186,180 433 $313,934,157 $12,207,225 $844,541,634

297 VA BayPort $58,887,930 276 $401,315,583 $13,748,257 $1,409,254,778

298 FL Community FirstCU of Florida $58,694,243 382 $372,649,281 $15,676,279 $1,307,591,226

299 TX A+ $58,681,255 402 $213,273,712 $10,404,680 $1,188,827,593

300 CA LBS Financial $58,575,308 194 $231,126,180 $18,830,805 $1,190,429,127


TRAINING AND DEVELOPMENT

Over the last year I have seen so many originators, processors, under-writers and closers work days—and sometimes nights—to help members get into homes. I marvel at the depth of expertise these people have. I see in-novative problem-solving and a consis-tent “can do” attitude at work in every corner of the real estate department. It is with simpatico for these people that I remember with great fondness my years working in each of those four key positions.

Do you know what else I see? I see a lot of me. And by that I mean I see workers in their “second half” of life—past 50 years of age.

Many of them can remember when our “tools” consisted of a 10-key calcula-tor with a tape and an IBM Selectric Typewriter. Yes, APRs were done by hand, and Closing Statements had car-bon paper!

Those who might not have started quite that long ago still have memories of Texas Instruments BA II or HP12C calculators and fighting with the fax machine, trying to get last-minute changes to a closing agent. Oh, those were the days!

THE MORE THINGS CHANGE …And while a bit of nostalgia can

bring a smile to my face, this particular

recollection also highlights one of my greatest worries.

We have been blessed with amaz-ing technology solutions and vendor partners that help us avoid missteps and risks that make our jobs easier. On this front there have been so many ad-vancements it makes my head spin.

But something hasn’t changed—something very important. Training and Development.

Thirty years later I am watching origination and fulfillment staff being trained the same way I was.

“Watch me, then try it, bring it to me for correction, and watch me some more.”

“Keep doing that for years and years, and you’ll be ready to advance.”

Guess what? It wasn’t really appeal-ing or efficient then, and it sure isn’t go-ing to attract millennials into our real estate departments.

TIME TO CHANGE Like so many of my peers, I am

proud of my journey up the ladder. I am the last one that wants to diminish that journey, but, as the leaders of this wonderful crazy business, WE HAVE TO GET OVER IT!

Does it really take processing for five years or more to be an underwrit-er? NO!

Are we ready to build training and development programs that resonant and entice younger workers? Can we lose the attitude that “competency comes only with time”?

We have twenty-somethings run-ning billion-dollar companies. Do we really believe that they can’t be taught to underwrite a loan? Do we thrive on keeping workers moving from job to job so they can see the big picture? Or are we happiest when someone learns their “piece” and wants to keep doing it for years to come?

It’s time to value “young, innova-tive, enthused and eager” over “older and wiser.” Let’s leave “older and wiser” to the owls.

Tracy Ashfield is president of Ashfield & Associates, a consulting and training business that assists credit unions with mortgage lending strategy, development, policies, product design and strategic planning. She also works with NCUA to provide training and edu-cation on residential mortgage lending for examiners and regulators.

I feel so grateful to be able to spend my days in credit unions and CUSOs across the country. I have had the good fortune to work with so many of leaders in our

industry, and I have met—and worked with—the best and the brightest that credit union mortgage lending has to offer.

The Last WordA Look at Big-Picture Issues Facing Credit UnionsBy Tracy Ashfield

Does it really take processing for five

years or more to be an underwriter?

ahead.Always a step

How do you deliver a mortgage program that keeps you ahead of the competition?

At CU Members, we’ve rebuilt our business model to boost your mortgage program with innovative new options that benefit your bottom line. It’s unlike anything in the industry, and all it takes is one

conversation to see how we’ve stepped up our game. Want to learn more? Give us a call.

Listening. Lending. Leadership.

CU Members Mortgage is a division of Colonial Savings, F.A. NMLS #401285

800.607.3474 ext.3225 [email protected]

STEP 1: Offer the widest range of loan options to capture every type of home buyer, with award winning service to retain your members for years to come.

STEP 2: Choose a mortgage program that’s built to match your resources and objectives. Never settle for one size fits all.

STEP 3: Work with CU Members Mortgage, a leader in mortgage origination and servicing for more than 30 years.

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Documents

ACUMA January 2016 Pipeline