With a significant number of new loans sold to Fannie Mae each year, Royal Credit Union’s employees began to voice concerns about the increasing complexity in the Fannie Mae guidelines, which made the home loan process time consuming and cumbersome.

“Process inefficiencies on Fannie Mae loans required significant extra time spent on each loan file due to retrieving additional documentation, re-reviewing added documentation,” said Royal CU Vice President of Mortgage Lending Matt Gerber.

Royal’s home loans department offers nearly two dozen loan programs, including new construction, second home, vacant lot, rural development and home equity. “Members had to go through more hoops than needed and team members had to spend more time than needed,” said Gerber.

Trevor and Sarah Ellefson with their daughter, Rylie, became ‘home sweet homeowners’ with a little help from Royal Credit Union.
Trevor and Sarah Ellefson with their daughter, Rylie, became ‘home sweet homeowners’ with a little help from Royal Credit Union.

In an effort to streamline operations, the $2 billion, Eau Claire, Wis.-based credit union contacted Fannie Mae and “engaged in a multi-phase discussion” to improve processes, said Gerber.

Teaming up with Fannie Mae

After four phone calls totaling 20 hours with three lead underwriters from Fannie Mae and the Royal Home Loans leadership team, which included the underwriting supervisor, regional sales manager, operations manager, processing manager, mortgage loan officer, and the vice president of home loan sales, progress was realized.

“The group scheduled one hour to address each situation that had been ‘gray’ and create more black and white guidelines,” said Gerber. “Clarity, for example, was needed on how to distinguish between sufficient or non-sufficient credit references.”

Documented example topics included the treatment of different types/statuses of student loans, quality of a borrower’s trade lines, borrowers who are working and going back to school or re-entering the workforce, and treatment of re-submitted applications, explained Gerber.

Before the discussions, Royal Credit Union sold approximately 1,400 loans to Fannie Mae annually. After the discussions, the credit union sold 2,000 annually, marking a 43 percent increase. Additionally, team members saved an average of 20 minutes per loan, which equates to a 55-hour savings each month. The results helped earn the credit union a 2017 Best Practices Award from Credit Union Journal.

“This increased team member satisfaction and engagement in the process,” said Gerber. “On average, it takes two hours to process each loan file. With the process efficiency gains noted, the same number of team members can process 27 more loans each month.”

Those efforts have earned Royal CU a 2017 Best Practices Award from CU Journal.

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