the 3 (or more) things you must know about mortgage lending

The Three Things You Must Know About Mortgage Lending

Presented by Nizar Hashlamon, Prime Alliance Solu2ons, Inc.

Many

I. Quick Review & Look Back.

II. Why Home Lending? Why Now?

III. THREE THINGS you ought to know.

IV. Where Will CUs Play?

Outline

Copyright © 2011 Prime Alliance Solu?ons

What Does Ancient History Tell Us?

We became Mortgage LendersWe refinanced more mortgages than we financed homes.

refinance

<

1978

FCUs granted

Long-‐termauthority

1998

Not much happened

Last RefiBoomof theCentury

1999

Refi Hangover / dot-‐comboom leads to

innova?on

1994

DU Created

2001

Prime AllianceBorn

2007

Housing BubbleBursts

2011

Unbridled Innova?on

BrightFuture

DarkTimes

A Brief History of CU Mortgage Lending

OriginaIons and Secondary Mkt Sales

Source: Callahan’s Peer to Peer So2ware

The 2%Decade

1996 2000 2004 2008 2012 2016

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

The SubprimeCrisis

Shared AspiraIon

In Crisis, Opportunity

Source: CU Housing RoundTable

5.4%

Two to Ten

A Really Brief Synopsis of the PastThree Years

Members flocked to their CUs...for refinance

The General Public Discovered CUs...for Refinance

CU Balance Sheet2010

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######)*+,-.#)/*,#01/23#

######4+/5#63./.+#01/23#

######78.1#01/23#

9.:+*#01/23#

Credit Cards Loans $36.05

Real Estate Loans $310.70

Auto Loans $164.27

Other Loans $54.81

!

CU Mortgage Assets Out-‐Perform

Through Real Estate Lending...

...we become relevant in our member’s lives

Our Only OpIon: Earn Our Way Out!

Through Real Estate Lending...

...we enable our CU to thrive

1978

CUs RefinancedWe made Mortgages

19991989 2007 2020

Three Stages of Credit Union Lending EvoluIon

2009

CUs Refinanced Mortgages and Financed Homes

CUs Become Home Lenders

Five Major Shi_s

Why Home Lending? Why Now?

#1 Member Demographics

#2 Consumers Seek Trusted Lenders

# 3 Homes ARE very affordable

#4 Mortgage Brokers Out -‐ Retail In

#5 We Need Revenue, Revenue, Revenue

...or THREE THINGS you ought to know.

Everything you always wanted to know about mortgage lending...

Mortgages are More Flexible

1

Service

RelaIonship

PurposeProducts

Investment

Trust

Term

2

Mortgages are More VersaIle

Two assets in one

and many more!

Mortgages are More AeracIve

3 What beeer service?What beeer investment?

The Market is different because...

This isn’t your father’s mortgage market.

The Market’s Changed...and Changing. We Must Change.

...GSE reform is inevitable.

The Market is different because...

Everything OLD is NEW

Again!

Where Will CUs Play?

Understand, Embrace and Live...

Geing Organized12-‐18 months

Shop & Buy3-‐6 months

Finance1-‐3 months

Enjoy Your Home3-‐30 Years

Geing OrganizedThe HOME Event:


What Members Do:

Research: Neighborhoods, Schools, Home Values and Home Types

Learn: About buying, financing and owning a home

Get Budgets/Finances in Order


What Members Do:





What Members Do:

What We Should Do:





What Members Do:

Help with budgeIng and Financing

AdverIse...AdverIse...AdverIse

Educate: Home Buying/Owning Seminars and Web-‐based tools

What We Should Do:

Shopping & BuyingThe HOME Event:


What Members Do:


Meet and Pair-‐up with Realtors

Search Online for Homes

What Members Do:




What Members Do:

What We Should Do:

Form Mutually Beneficial Realtor RelaIonships

Provide Online Tools to help members shop




What Members Do:

What We Should Do:

FinancingThe HOME Event:


What Members Do:


Choose Their Financing OpIons

Stress/Anxiety/Freak Out!!

Choose a Lender

What Members Do:




Choose a Lender

What Members Do:

What We Should Do:




Choose a Lender

What Members Do:

Campaign for Business

AdverIse...AdverIse...AdverIse

Fill the White Space: Products, Market Niches

What We Should Do:

Living the American DreamThe HOME Event:


What Members Do:


What Members Do:

Remodel

Re-‐landscape

Redecorate

Grow Their Families

Create Financial Plans

Purchase, Purchase, Purchase


What Members Do:

What We Should Do:

Remodel

Re-‐landscape

Redecorate

Grow Their Families




What Members Do:

What We Should Do:

Remodel

Re-‐landscape

Redecorate

Grow Their Families



Closely Monitor Servicing PormoliosPredicIve AnalyIcs

Help Create Financial Plans

Fill the Financial Service Needs

Consistent MarkeIng Reminders

Mortgage Lending IS a core credit union strategy


The Take Aways

Know Your History

Commit to the Big Goal

There’s Three Things You Ought to know about

Mortgage Lending

Home Lending is THE Strategy

for CUs

[ We Thrive As We Become Home Lenders ]

Thank you!

Nizar HashlamonPrime Alliance Solutions
