Beyond Mortgages: Indiana Members Credit Union Sees Success with Real Estate Services Program01.06.2014
Like other credit unions over the last several years, the Indianapolis-based Indiana Members Credit Union (IMCU) had witnessed a big boost in members refinancing their homes to take advantage of what were historically low interest rates. In 2011, 82 percent of mortgages at the $1.4-billion credit union were refis. Marketing campaigns featured rate specials and discounts, which kept the interest in refinancing high.
As record-low mortgage rates began to adjust upward, along with what had been stagnant or declining home values, IMCU knew homeowners would have less incentive to refinance (plus, many of its members had already done so). It also knew people would still need to buy or sell. Getting into a first home, looking to up-size or down-size, or moving due to career changes would continue to keep the purchase-mortgage market relevant, along with IMCU purchase loans.
To cast a wider net toward attracting both current and potential home-buying members, the credit union formed a partnership with CU Realty Services, which provides comprehensive real estate services to credit unions across the nation.
Power of Partnership
"More than half of potential home-buyers and sellers now begin their home search on the Internet and wait longer to solicit the advice a real estate agent," says CU Realty president/CEO Mike Corn. "As a result, there is tremendous opportunity for credit unions to engage members by becoming their first point of contact."
IMCU members have taken notice. Since its launch in July 2012, more than 486 have registered for the program. And the credit union measured a 37 percent increase in its closed mortgages over the prior year-well above the typical year-one average for the program. According to Corn, "our credit unions generally see a 20 percent increase in the program's first year, with up to 40 percent in subsequent years. IMCU's success is a real win for the credit union, as well as its members and local realtors."
IMCU president and CEO Ron Collier agrees. "Participating in the program has assisted us with mortgage lead generation, and building better realtor relationships," he states. "In addition, our members have saved over $61,000 in rebates."
Blueprint for Success
According to Shelley Nescola, IMCU mortgage service representative, the full-service program gives members quick access to search for homes, research neighborhoods, and connect with an experienced agent in IMCU's preferred network. The program also includes a rebate benefit at closing when they use one of IMCU's preferred agents to buy or sell their home.
"These features help us reach more of our home buying members much earlier in the process-before they connect to a realtor and before they are interested in pre-qualifying for a loan," she says. "It's truly about becoming their first point of contact. We help them find the home of their dreams, and when they are ready, we also help finance it."
At IMCU, branch managers originate loans, so branch-level training was critical. CU Realty hosted face-to-face training with all member-facing employees and provided online tools to help them learn about the program.
"CU Realty's follow up and follow through has been exceptional," says Nescola, "There's an 800 number for ongoing assistance, which is a great help as employees learn the program and grow more comfortable with the purchase mortgages side of the business."
In addition to mortgage staff talking up the program, members could learn about the program through lobby posters, counter promos handed out at teller stations and information on the credit union website.
"Advertising the program and related events has been the key," said Nescola. "We actively build awareness of what's going on with our real estate program each month."
That includes Realtor Q & A Days, twice-a-month open events where members and potential members meet one on one with credit union representatives and local agents to ask about home buying and the local real estate market. At IMCU, the events have proven very popular, and plans to ramp up the program for next spring’s buying season are underway.
A strong component of the IMCU program is its network of pre-screened realtors for members needing agent referrals. CU Realty built and trained a local network of experienced real estate agents that IMCU and its members can trust. These hand-picked realtors discount their commission at closing-with 20 percent returned to the member for use in lowering closing costs or paying for moving expenses.
"These agents get it," indicates Nescola. "They understand the credit union way and are very supportive. They are a valuable resource we provide our members, and we see them as an extension of our credit union."
Cultivating the realtor-branch manager relationships is important to the program's success, and IMCU encourages these agents to visit branches and get to know staff in the mortgage areas. It also hosts networking events such as nights at the local ballpark, where agents and IMCU staff can interact.
"Our branch managers are very protective of their members—as they should be-so realtors must get in front of them to build trust for referrals," says Nescola.
Opportunity Creates Positive Outcomes
According to Nescola, shifting from a traditional mortgage department to a one-stop real estate resource for members was easy with CU Realty providing the tools, training and follow-up needed to ensure its success. Among the program's greatest benefits: the realtor referral network and the member rebate at closing.
"Both members and realtors love this program," says Nescola. "It has been embraced by upper management, has created enthusiasm among staff and has definitely strengthened our mortgage business."