Digital Federal Credit Union launches self-service mortgage portal

When Jason Sorochinsky began revamping the mortgage origination process at Marlborough, Mass.-based Digital Federal Credit Union in 2019, he knew it wasn’t feasible to always offer the lowest rates.But with the help of a few people FinTech PartnershipsLater, he was able to offer the process to members using an online portal and increased transaction volume by 60%.

“Our value proposition really boils down to one sentence, which is we want to be known for speed and service using digital tools and technology,” said Sorochinsky, director of lending at the $12.1 billion DCU.

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Demand for consumer loans is suppressed Since the Fed began raising interest rates in early 2022, even in Rates have remained stable since the middle of last yearCredit unions looking to expand their loan portfolios are increasingly turning to outside help Identify untapped markets and Selling participation rights to other institutions.

DCU officially launched its self-service mortgage portal in 2022 after a year-long pilot platform optimization process. The digital lending platform, built by New Jersey software company Blue Sage Solutions, leverages the credit union’s “consumer direct” model to allow potential borrowers to apply for mortgages and home equity loans and refinance existing loans without the need for a staff member.

After selecting which of the three products they would like to apply for and entering property details such as postal code, expected down payment and estimated purchase price, consumers can see the maximum amount they can offer for the property and select the best option their prices and terms. This phase also allows members to electronically verify their income, employment and other assets owned to support their eligibility.

During the application process, borrowers concerned about market volatility can use OptimalBlue’s Rate Lock API to lock in a rate for 15 to 90 days.

Next, DCU will leverage Blue Sage’s integration with mortgage fintech Optimal Blue’s product and pricing engine to order credit reports, verify loan pricing, run documents through Fannie Mae and Freddie Mac and Make other calculations. ClosingCorp provides additional support by calculating application and assessment fees and generating disclosure agreements for members to sign.

Members will receive an email or text message prompting them to proceed with next steps within the DCU Mortgage Portal and sign the necessary forms after submitting the initial application. Once fees are paid, an order for standard items is submitted, including title insurance, appraisal and flood certificate, and then a second round of confirmation documents are sent back to the applicant for signature.

After all necessary forms are signed, the documents are submitted to the underwriting department for further processing — which DCU says can be done in as little as 30 minutes and does not require a credit union representative. Two-way communications with DCU Mortgage Officers, Processors, or someone more closely is available through the chat function as well as informational videos to assist members with any questions.

“No matter what the force is, whether it’s a recession, high interest rates or low inventory, we’re still able to succeed because we focus on speed and service using digital tools and technology,” Sorochinsky said. Through the self-service portal, DCU Able to increase loan volume from approximately $1 billion in mortgages when negotiations began in 2019 to $1.6 billion in 2023.

Dublin City University is one of many other institutions adding new technology in the hope of further boosting membership growth and increasing lending.

$18.5 billion in assets chicago united credit unionFor example, with the help of New York-based fintech company MANTL’s deposit origination system, core membership increased by 22% and deposits increased by more than $500 million in six months. straight line loan An AI-powered chatbot has been launched to provide assistance during the application process.

Although Fed rate cut expectations has not yet been implemented, and Home values ​​continue to riseborrowers remain on the fence about new purchase or refinancing opportunities. Market takes a breather That’s already happening as mortgage rates dropped slightly at the end of March.

Debra Shultz, vice president of mortgage lending at CrossCountry Mortgage Activity should increase over the next two years That’s because the suggested rate declines will give way to lower mortgage rates – incentivizing existing borrowers to refinance to better deals.

“Today, borrowers understand that real estate is a great investment [as] “This gives them the freedom to build their dream home, take advantage of tax benefits and build wealth over time,” Schultz said. “The opportunity to refinance the loan at a lower interest rate within the next 1-2 years is a reality. “”

Experts at Cornerstone Advisors and Datos Insights stressed the importance of conducting proper due diligence when vetting third-party companies and the products they offer, but equally emphasized the value of exploring new technologies.

Eric Weikart, partner at Cornerstone Advisors, said: “It may sound like a no-brainer, but despite having system capabilities, many underwriters still draw credits manually and calculate ratios manually. Sometimes, this is due to system setup issues, but many times it is Because that’s the way they’ve always done it and they’re unwilling to change.”

Stewart Watterson, strategic advisor at Datos Insights, said automation is an important feature for an underwriting program to be truly effective, but only if “comprehensive risk assessment, regulatory compliance and clear guidance” are also in place.

as Consumer expectations for banking experience To continue their growth trajectory, institutions will continue to adopt next-generation technologies to meet these needs.

“Borrowers have much higher expectations for approval and closing speed than they did 20 or 30 years ago, as well as a technology-enabled process backed by knowledgeable, professional loan officers and operations staff,” said Christy, Chief Lending Officer Soukhamneut said. Austin’s $4 billion University Federal Credit Union. “We are actively implementing user-friendly and intuitive mortgage technology so our sales team can focus on the member and referral partner experience.”