January • 2015 ACUMA PIPELINEMAGAZINE U.S. Macro Outlook 2015: Spirits Unleashed By Mark Zandi n Page 30 SearchingSearching forfor Solutions?Solutions? FindFind ThemThem atat ArchArch MI. BroadenBroaden your your scope scope with with targeted targeted solutions solutions fromfrom Arch MI that support youryour diversediverse mortgage mortgage lendinglending needs. needs. Win Win more more business business and and reducereduce youryour riskrisk exposure byby originatingoriginating with with Arch Arch MI. MI. • •Specialty Specialty mortgage mortgage insurance insurance programs, programs, competitivelycompetitively priced • •Capabilities Capabilities to to provide provide mortgage mortgage credit credit enhancementenhancement outsideoutside of of the the traditional traditional GSE GSE MI MI business business modelmodel • •Integration Integration with with industry-leading industry-leading LOS LOS andand pricingpricing engines • •Contract Contract Underwriting Underwriting services services Expect MoreMore fromfrom thethe Right Right MI MI Partner. Partner. • Comprehensive Underwriting training • Comprehensive Underwriting training LearnLearn more more by by contacting contacting your your Arch Arch MI MI • •Financial Financial strength strength and and AccountAccount Executive Executive at at 800.909.4264 800.909.4264 readinessreadiness to to satisfy satisfy PMIERs PMIERs or or by by visiting visiting www.archmicu.com. www.archmicu.com. © 2014 Arch Mortgage Insurance Company 169-01-15-CU © 2014 Arch Mortgage Insurance Company 169-01-15-CU TABLE OF CONTENTS SearchingSearching forfor Solutions?Solutions? FindFind ThemThem atat ArchArch MI. 2 CU Mortgage Lending, A real alternative for members BroadenBroaden your your scope scope with with targeted targeted solutions solutions fromfrom Arch MI that support youryour diversediverse mortgage mortgage By Bob Dorsa lendinglending needs. needs. Win Win more more business business and and reducereduce youryour riskrisk exposure byby originatingoriginating with with Arch Arch MI. MI. 4 In the Pipeline: Insights and Observations on CU Mortgage Lending • •Specialty Specialty mortgage mortgage insurance insurance programs, programs, competitivelycompetitively priced 4 Mortgage Insurers Start the New Year with New Master Policies • Capabilities to provide mortgage credit enhancement • Capabilities to provide mortgage credit enhancement By Arch Mortgage Insurance Company outsideoutside of of the the traditional traditional GSE GSE MI MI business business modelmodel 6 ACUMA 2015 Annual Conference • •Integration Integration with with industry-leading industry-leading LOS LOS andand pricingpricing engines September 14-16, Bellagio Las Vegas • •Contract Contract Underwriting Underwriting services services Expect MoreMore fromfrom thethe Right Right MI MI Partner. Partner. 7 Saving for a Downpayment Takes Time and Sacrifice, but the Payoff Remains • Comprehensive Underwriting training By Jessica Lautz • Comprehensive Underwriting training LearnLearn more more by by contacting contacting your your Arch Arch MI MI ACUMA’s Exhibit at the 2014 NAR • •Financial Financial strength strength and and AccountAccount Executive Executive at at 800.909.4264 800.909.4264 8 readinessreadiness to to satisfy satisfy PMIERs PMIERs or or by by visiting visiting www.archmicu.com. www.archmicu.com. By Bob Dorsa 10 Credit Union Uses eRegistry for eNotes to Bring 21st Century Efficiency to its Mortgage Process 13 ACUMA Sets new record for 2014 Annual Conference Attendance… By Bob Dorsa 18 ACUMA 2015 Real Estate Lending Workshops, Why Should You Attend? May 20-21, San Francisco – June 30-July1, Boston 20 Millennials: Challenge and Opportunity By Ann Clurman and Rob Callender 30 U.S. Macro Outlook 2015: Spirits Unleashed By Mark Zandi 40 The Intricate Art of Today’s Mortgage Underwriting By Jerry DeMuth 46 The Infrastructure Predicament By Terry Wakefield 55 Market Share–Credit Unions Are Holding On! By Tracy Ashfield © 2014 Arch Mortgage Insurance Company 169-01-15-CU © 2014 Arch Mortgage Insurance Company 169-01-15-CU January 2015 - PIPELINE 1 FROM THE DESK OF ACUMA PRESIDENT BOB DORSA ACUMA PIPELINEMAGAZINE ACUMA Pipeline is a publication of the American Credit Union Mortgage As- sociation, PO Box 400955, Las Vegas, NV 89140. CU Mortgage Lending Bob McKay Baxter Credit Union A real alternative for members Chairman As I watched the President’s State of the Union mes- Mark Wilburn Truity Credit Union sage this week he reminded us of the tough times our na- tion has endured the past few years. It is great news that Vice Chairman our economy is back on track and the future is once again bright for many. Pam Davis From our corner of the world, the recognition that Delta Community CU Credit Unions are perhaps the only real alternative for con- Treasurer sumers seeking competitive housing finance options. Since ACUMA began in 1996 this has been a resil- Barry Stricklin ient theme propelling us forward. More and more Credit Tower FCU Unions have discovered that home loans are the key driver Secretary for financial security and member satisfaction. We have witnessed in the past decade our market share rise from John Reed a mere 2% at the beginning on this century to above 8% Maine Savings FCU today and constantly rising to our 10 year goal to reach double digits by the end of next year. Director While achieving goals are most important to business leaders, in the case of Credit Unions assisting borrowers with home loans speaks to the fundamental fabric of our busi- Tim Mislansky ness, dating back to our origins. The updated version would be instead of pooling funds in a Wright-Patt Credit Union single sponsor or affinity group, Credit Unions have found a real niche originating and more Director importantly servicing those loans in the communities in which they serve. This comment was echoed by the President of the NAR at ACUMA’s Fall Conference. Brown also reflected on the parallel in what Credit Unions do best to what REALTORS® do best, serve the com- Michael Patterson, munity in which they live, work and share. Financial Partners We had many conversations this past year around the topic of working with Realtors. I Credit Union content we may be over thinking this issue. If we just get back to basics we have more in Director common with Realtors than we know. Now is the real opportunity. We have an entire new generation of younger borrowers entering the home-buying marketplace. Many of these indi- viduals may not be that familiar with what Credit Unions offer. I see this as the perfect intro- Bob Dorsa duction. Working together with REALTORS® in your community you can provide valuable President information and trust sought by just about every borrower. In return securing the loan will give your organization an opportunity to grow based on leveraging the business relationship with the borrower for additional CU products and services. So the table is set. ACUMA works hard each every day to make this job a little easier. Whether exploring building relationships through the National Association of Realtors to The information and opinions pre- providing outstanding education to learn from professional and peers alike those all impor- sented here should not be construed as a recommendation for any course tant best practices to success. There are no shout cuts but we know our devoted professional of action regarding financial, legal or real lending professional have a resiliency second to none. I look forward to speaking with accounting matters by ACUMA, The many of you and seeing some you at our 2015 Educational events. It doesn’t get much better ACUMA Pipeline or its authors. than this! © Copyright 2014 by ACUMA. All rights reserved. Respectfully, Printed in the USA Bob Dorsa, President/Founder 2 PIPELINE - January 2015 Join us Pictured above: ACUMA President Bob Dorsa and Tracy Ashfield. should you join ACUMA? Because, just like you, we realize the importance of Why CU mortgage lending to the future of the credit union movement. ACUMA is: v an association whose only mission is CU mortgage lending with a membership made up exclusively of credit union professionals and their primary suppliers. v dedicated to serving the mortgage needs of both current and prospective credit union members and their families. v a committed advocate of CU mortgage lending constantly promoting the benefits of our programs and the value of membership. v actively working to build relationships with REALTORS®, Home Builders and other influential housing affiliated groups. v the single most powerful resource available when it comes to networking, relationship building and growing your market share. Join us today at www.acuma.org IN THE PIPELINE: INSIGHTS AND OBSERVATIONS ON CU MORTGAGE LENDING Mortgage Insurers Start the New Year with New Master Policies By Arch Mortgage Insurance Company The Great Recession launched an era related to when and for what reasons the of sweeping change for the mortgage mortgage insurers could rescind cover- lending industry – change that is still age on a loan. unfolding as we move into 2015. In late 2012, the GSEs, in conjunction The Great Mortgage lenders, including credit with the FHFA, provided a framework unions, naturally felt the greatest im- for MIs to develop new master policies Recession pact as new regulations and safeguards that would cover those loans purchased launched an era of were introduced to the home purchase by the GSEs, with an emphasis on: process and mortgage finance system. n Standardizing certain