Bethpage Federal Credit Union ($5.7B, Bethpage, NY) saw an opportunity in the real estate market when Wells Fargo began dissolving partnerships with agencies on Long Island.Now, the 241,936-member credit union has loan officers posted in approximately a dozen real estate offices and plans to double that number soon.
Its strategy of putting loan officers in front of real estate agents, hiring seasoned loan officers, aggressively generating and following up on leads, and expanding its relationships with brokers has helped Bethpage become the fourth-largest home lenderin its home market and replenish a portfolio waning from a dip in equity lines.
CU QUICK FACTS
BETHPAGE federal Credit Union
data as of 06.30.14
- HQ: Bethpage, NY
- ASSETS: $5.7B
- MEMBERS: 248,079
- BRANCHES: 25
- 12-MO SHARE GROWTH: 5.85%
- 12-MO LOAN GROWTH: 12.61%
- ROA: 0.58%
In the past we were mostly a refinance shop, but our production has now gone from about 85% refinancing to 50-50purchases and refis, says Michelle Dean, senior vice president of lending and investment services.
The credit union’s twice-yearly continuing education seminars for real estate agents typically attract 100 agents each, and it makes sure to include relevant panelists, such as real estate agents and closing attorneys, in its seminars for potentialhomebuyers.
Bethpage recorded $1.97 billion in first mortgage loans in the first six months of 2014, up 10.54% from one year ago, according to Callahan & Associates. The average for all billion-dollar-plus credit unions in the United States was $792.4 million forthe same period.
Meanwhile, Bethpage handled 4,483 mortgage applications in 2013, compared with 4,489 for Citibank. That gives both a 4.4% share in Suffolk and Nassau counties, according to MortgageAnalyzer data from Callahan. Wells Fargo had 13.3% and JPMorgan Chase had 13.2%.
About 70% of our purchases come from our outside loan officers, and most of that is from Realtors, Dean says. In fact, Realtors now create about 20% of our production.
We haven’t even scratched the surface.
The following best practices can help credit unions improve their own real estate agent referrals.
The Purchase Promise
No one gets paid until the deal is done. The Purchase Promise is Bethpage’s way of making that happen. Dean also calls it the 5-30 issue a commitment to the borrower in five days and close the loan in 30 days.
In our market, the average is more like 60 days, so to have it ready in 30 is really good, the 19-year Bethpage veteran says.
Dean says the communication among the borrowers, brokers, lawyers, and underwriters is largely how Bethpage keeps the deal moving to consummation.
The key to our success is the process, building the infrastructure to make all this work, including the people, she says.
Pay To Play
Wells Fargo began pulling out of its real estate agent partnerships about three years ago, Dean says, and Bethpage began moving in. The real estate agent offices contractually guarantee Bethpage exclusive on-site presence for six months to a year, andthe credit union has snared about 30% of the business generated in those offices as a result.
You can’t require an agent to use the house financing company, but being present in their office with a reliable representative who has a lot of experience and contacts makes a difference, Dean says. It puts us in front of them.
Most of the agencies are smaller firms that no longer interest Wells Fargo, Dean says. But the credit union is close to inking a deal with a larger agency that tried the credit union in two of its offices and liked what it saw enough to add 10 more tothe pact.
That’s a drop in the bucket in one of America’s largest housing markets where thousands of agents and agencies vie for the business.
We haven’t even scratched the surface, Dean says.
According to Dean, Bethpage considered owning its own agency, but the market which is dominated by small communities where homes are primarily sold through local listings didn’t lend itself to that strategy. But setting up shop insideagencies that serve those towns does.
How Do You Compare?
Can you name your biggest competitors when it comes to mortgage market share? MortgageAnalyzer can.
More Loan Officers, More Broker Business
Bethpage employs approximately 30 loan officers in real estate agencies and scattered among its own 29 branches.
They come to us with their own centers of influence, Dean says of the loan officers on board and those to be hired. They’ve been in business for years, including some from real estate offices, and they bring their leads andtheir contacts.
The credit union is also building its broker channel through three account executives that call on brokers for deals to underwrite.
About 10% of our business has been in that channel, Dean says. Next year we expect it to be 20%.
A Nod From The NAR
According to Dean, Bethpage has built a strong brand through community sponsorships like a popular air show and baseball park as well as through its rates, terms, and home ownership products.
Now we’re building these new relationships with Realtors, she adds.
The head man at the nation’s largest real estate organization says that’s a good idea.
It’s the Realtor who, in most cases, is working with the future home buyer, says Steve Brown, president of the National Association of Realtors. If you want to build your mortgage business, you need to connect with the Realtorsin your communities.
Brown, co-owner of a Dayton, OH, agency with six offices and 300 agents, advises credit unions to help real estate agents understand the difference between a credit union and a bank.
For example, partnerships like Bethpage is developing are built on a common goal to help a prospective homeowner buy a property, he says.
It’s a partnership built on serving the community in which you both work.