VANCOUVER, Wash.-Columbia Credit Union has become the No. 1 lender in Clark County, Wash., in both mortgages and vehicle loans.
Bill Fulk, EVP and chief operating officer for the $851-million CU, said through April, 37% of its business was being driven by home loans, while 26% was from indirect auto loans, and 14% from business loans. He said another 23% of its loan business is what it calls branch loan production, a category that includes car loans, credit cards and other loans transacted in branches.
"We don't rely on one specific area to carry all the weight," he said. "Our competitors are helping us, as well. We are being proactive while they are being reactive. We are not knocking out of the park in any one area, but we are proactive and consistent."
New Staff, New Volume
Fulk told Credit Union Journal Columbia's mortgage lending has been ramped up in part due to the hiring of a number of sales professionals in recent months. He noted most credit unions have a service-oriented mentality and "do a great job of handling situations when they walk in the door," but Columbia wanted to be more proactive.
"We hired Jeff Bannan, a gentleman with extensive experience," Fulk said. "He worked in banks before setting up his own company, Vancouver Mortgage-through which he had 20 years of working with Realtors and builders. He brought in another dimension to the good infrastructure we already had in place. He helped set up our home loan department and doubled our volume in four months."
A further key to success, Fulk said, is the fact Columbia has retained the service culture it had in place while adding a sales culture.
"We realize the relationships we have with our members are long-term ones, so now we more proactively set up networks," he explained. "We touch about one-out-of-three households locally, but now we go out and engage Realtors and other people. These networks drive new business opportunities and give us an opportunity to reach the other two households we don't touch. We are getting out into the market and telling people about things our existing members already know."
Columbia sells close to 100% of the mortgages it writes, Fulk said, adding the CU wants to provide the service of home loans to its members, but because of the lower-rate environment it does not want to put those loans on its balance sheet.
Retire It Mortgage
Next up in Columbia's pipeline is a mortgage product it's preparing to launch called he "Retire it Mortgage." The product will have a term of between five and 12 years, with maximum closing costs of $50 and rates as low as 2.99%.
Fulk said Retire It is designed to appeal to homeowners in their 40s or 50s, who are starting to think about transitioning from working to enjoying retirement, and who don't want the burden of a 30-year loan hanging over their heads.
"They have paid down their mortgages significantly so they have a great loan-to-value proposition, and we are seeing a lot of people in this group who have great credit," he said. "What we will do is customize their mortgage to the number of years they have left until they retire."
The benefit for the CU is the short-term duration of such loans reduces interest rate risk, so Columbia can put them on its portfolio, he said. By reducing the fees and closings costs, the program is expected to bring in a "good number" of borrowers.
"We make this make sense for members," he said. "The mortgage size is smaller, so title insurance is less. If the loan amount is less than $250,000, we are not required to do an appraisal, which in this area costs $500. We do an inspection and we get a BRO, or broker price opinion, which costs $75."