SPARTANBURG, S.C.-The $38-million Spartanburg Regional FCU was recently named by SNL Research as having the nation's lowest average rate on a 30-year mortgage, 2.50%.
When asked how the small credit union achieved such a feat, CEO Pat West squelched all questions about cost of funds and ALM, deferring credit to its partner, Quicken Loans.
"I saw a story about us having the lowest rate around and I thought, 'Oh, that is misleading. Those are Quicken's rates,'" she recalled, adding, "but we have been doing mortgages since we were about $3 million in assets. I have never thought our size should stop us from offering mortgages to our members."
SRFCU has partnered with Quicken for about two years, and it had other partners previously, West explained.
"With Quicken we can offer FHA, VA, USDA and other types of loans," she said. "Whatever is out there they have got it."
Sandra Sullivan-Woods, branch manager, said SRFCU acts as a wholesaler.
"We get the origination fee, which generates income for us," she said. "We do an initial disclosure to members, but everything else in underwriting is done by Quicken. We like it, and we feel like we are offering the mortgage, and so our members like it."
Spartanburg Regional does home equity loans in house, Sullivan-Woods added.
West said when a member expresses an interest in a mortgage, SRFCU performs the initial legwork-including taking the application and collecting documents-and then sends the entire package to Quicken.
"When it closes we get an origination fee," she said. "At some point we hope to keep some of these in-house, but we are not quite comfortable yet. For now we are happy and the members are happy. Members like dealing with someone they know rather than going online or dealing with a stranger they have never met before. Mortgages can be frightening to some people. We hold their hand and get them through it."
SRFCU has "good rates" on its home equity loans, West said (3.25% at press time), and the credit union pays the closing fee.