Faster Mortgage Closing Time Leads to Portfolio Growth

Sponsored by D+H.

Northwest Federal Credit Union’s management team was in need of a compliant and efficient mortgage lending solution due to its growing portfolio. CUES member Joe Talmadge, the credit union’s VP/mortgage lending, led the charge. After looking at multiple options, Northwest FCU, Herndon, Va., concluded that D+H’s Mortgagebot solution was the right choice, meeting the CU’s business requirements and providing the necessary support.

“D+H is really a trusted advisor for us,” Talmadge explains. “We looked to them to provide us with insights and recommendations based on their breadth of knowledge in serving hundreds of clients that we wouldn’t necessarily have on our own.”

For the deployment, Northwest FCU elected to supercharge its effort by adding D+H’s MortgagebotLOS™, MortgagebotPOS™, and LaserPro®, creating a fully integrated end-to-end solution.

A Speedy Ascent to Leadership

Northwest FCU, with $3.1 billion in assets and 200,000 members, has become an industry leader for speed in mortgage loans. The combination of MortgagebotPOS, MortgagebotLOS, and LaserPro shortened time-to-close for first-time mortgage loans to less than 30 days, more than 30 percent lower than the industry average.

This is a huge competitive differentiator for Northwest FCU, as borrowers seek out lenders that can close loans quickly. The credit union's speed has drawn in thousands of new customers from outside its immediate geography. Real estate agents, which also place a major emphasis on speed, have become passionate advocates for Northwest FCU, and a leading referral channel for its mortgage lending business.

This increased speed and efficiency is translating into real money, and major growth, for Northwest FCU. The credit union saw mortgage lending revenue grow 75 percent last year, and it expects to top $500 million this year.

Faster Loans Equal Increased Productivity

Fewer systems, the elimination of data silos, and more streamlined processes are also helping Northwest FCU realize major cost savings.

With increased mortgage loan applications comes the need for increased staff. Northwest FCU would have had to hire three times as many mortgage specialists using other mortgage lending technology, contributing to more than $1 million in salary and benefit costs.

Seamless integration between loan-origination processes and third-party systems used for flood insurance, appraisals, and other mortgage lending-related activities creates substantial operational efficiencies as well. For example, the time it previously took to process flood insurance verification was reduced from around 10 minutes to less than 30 seconds. Considering Northwest FCU expects to process in excess of 18,000 mortgage loan applications this year, the total productivity savings are in the millions of dollars.

TRID-Ready on Day One

With the TILA/RESPA Integrated Disclosure Rule (TRID) going into effect at the same time as the mortgage lending implementation, the stakes for Talmadge and his team were high. Some credit unions and banks in Northwest FCU’s market paused mortgage lending applications for a few weeks or more to effect the changeover to TRID. For Northwest FCU, this would have translated into tens of millions of dollars in lost revenue. Getting TRID compliance right from day one was non-negotiable.

Talmadge’s team turned to D+H to ensure that it was ready for the switch. With the help of D+H Education Services and Support Services, the credit union put the right processes in place. This included online training from D+H Education Services, as well as several webinars on TRID-related compliance topics. Northwest FCU’s technology backbone also contained LaserPro, with its $1 million compliance warranty, which bolstered confidence in the entire process.

“D+H has been there for us – helping us to diagnose problems and quickly resolve them, guiding our configuration and deployment of new solutions, or training us on best practices or new compliance regulations like TRID,” says Talmadge.