During a breakout session at the 2013 American Credit Union Mortgage Association (ACUMA) annual conference, Joe Brancucci, CEO of GTE Financial ($1.6B, Tampa, FL), talked about a personal mortgage closing experience. When Brancucci started at GTE, he moved across the country from Seattle to Tampa. He scheduled the closing for his new home on the Friday before he was to start as CEO, but when he arrived at the credit union, not GTE, to sign the closing papers, they weren’t ready. The credit union told him he would have to wait until Monday. Brancucci reached out through his credit union connections, which included the CEO of the institution that had his mortgage, and was able to close as planned.
The experience made Brancucci question whether this was a regular practice across Florida, and after asking around, he discovered it was. The new CEO recognized an opportunity for GTE to create a strong brand in the mortgage market by promising to deliver closing papers in advance of the closing date. GTE now guarantees to deliver closing papers to the title company five business days prior to the closing date for purchase money mortgages. Brancucci brought the idea from his previous credit union, BECU, which had implemented a similar strategy.
To date, GTE has been successful in hitting its five-day promise and delivers the papers early nearly 100% of the time, according to Brancucci.
“We created a brand, the brand was dependability,” Brancucci said during the conference. “We knew how to do this [and] we were professional.
This improved brand helped GTE increase its mortgage market share in the Tampa metropolitan area from 1.14% in 2011 to 1.81% in 2012, an annual improvement of 67 basis points according to Home Mortgage Disclosure Act (HMDA) data. Efforts like this in conjunction with its HARP loans promotions helped GTE become the largest credit union mortgage originator in Florida.
“We want to be known as THE home loan lender in the state of Florida,” Brancucci said at MACUMA.
In 2011, GTE sold $70 million of mortgages to Fannie Mae and Freddie Mac. That number increased to more than half a billion in 2012. The jump was a direct result of GTE increasing its first mortgage origination nearly six fold from 2011 to 2012, going from $99.5 million to $573 million. The increased non-interest income generated from these mortgage sales helped the earnings of the credit union, too, which increased from 27 basis points in 2011 to 56 basis points in 2012.
The refinancing boom is over, and credit unions are now shifting their focus to purchase mortgages. To remain competitive, the industry must now look for opportunities to elevate service and expectations. Members, realtors, and title companies are more inclined to do, and refer, business with financial institutions they can rely on to have closing papers ready in advance. All it takes is changing the internal expectations at the credit union of when it will deliver the papers.