A Houston CUSO has expanded its services to originate mortgages for credit union customers.
The new service by eCU Mortgage is designed to streamline the mortgage process and deliver more revenue to credit unions when loans are sold on the secondary market.
The CUSO is a subsidiary of First Service Credit Union of Houston ($671.7 million in assets, 56,669 members). The CUSO was formed only three years ago, and is now also confining its business to Texas. The state’s 467 credit unions had 8.5 million members and $97.5 billion in assets as of March 31, or 7% of the nation’s credit union assets.
“We want to do our breakout here. Our goal is to be nationwide,” said Jackie Adams, eCU Mortgage’s vice president.
The mortgage origination solution supplements a credit union’s existing loan efforts: The credit union still initiates the loan, but eCU Mortgage handles the closing and funding. The eCU system allows a credit union to maintain control over its members’ loan experience.
For one thing, the system will notify the borrower’s credit union contact with every change in the loan documentation. When a member shows up a branch after emailing a document, a loan officer at the credit union doesn’t have to respond with a blank stare.
“They’re always in the loop on what goes on with the loan,” Adams said.
The structure is also designed to comply with the Real Estate Settlement Procedures Act (RESPA), the 1975 law designed to protect homebuyers by requiring disclosures and prohibiting kickbacks and other abusive practices.
“Member relationships are the core of any credit union’s business, and this third-party origination system is designed with that in mind,” she said. “We help credit unions leverage those relationships and deliver top-flight service without the expense of building their own loan origination systems.”
After closing, the eCU Mortgage process can sell the loans on the secondary market, returning revenue back to the credit union at margins eCU says are “well above the industry average.”
The eCU Mortgage third party origination offering can also be used by larger credit unions that have their own mortgage infrastructure but want a partner to handle FHA, VA, and USDA loans, Adams said. “If they’re a little bit skittish about government loans, we’re the perfect partner.”
