End-to-end Fannie Mae Technology Boosts Volume at First Heritage
By Karen Nielsen | July 28, 2016
In the past 12 months, First Heritage Financial has experienced a 27 percent increase in conforming conventional loan volume without any change in staffing.
Hearing that number, your first assumption might be that the Pennsylvania-based credit union service organization (CUSO) put a hold on vacation time. Or instituted a six-day work week. But you’re not even close.
First Heritage has spent the last 12 months incorporating best practices to fully embrace end-to-end Fannie Mae technologies – from quality control analysis via Early Check™ to Servicing Management Default Underwriter™ (SMDU™).
The result: higher-quality loans, faster turnarounds, and process efficiencies that free up staff to focus on increasing volume and spending more time with borrowers.
“First Heritage has shown that you can adapt Fannie Mae technology and guidelines to whatever market needs you are trying to meet,” says Lori Keasel, customer account manager at Fannie Mae.
New (Experienced) Help
First Heritage CEO John Giordano set the wheels in motion when he decided to enhance the company’s quality control (QC) and compliance department with the addition of a full-time QC and compliance position.
“My plan was to create greater efficiencies for the company by adding industry compliance experience and embracing tools that were easy to apply and right in front of us every single day,” Giordano says.
Flossie Rad, the organization’s vice president of systems and compliance, hired Kimberly McGrath, a former Fannie Mae team lead from centralized repurchasing with 34 years of mortgage experience.
With instructions from Rad, McGrath began analyzing hundreds of loans and reviewing two years of business to create trending data reports. She incorporated these into the existing technology tools used through Fannie Mae's Desktop Underwriter® and Collateral Underwriter® (CU™).
McGrath began conducting training classes, sending out bulletins with Fannie Mae news, and ensuring the integration of Fannie Mae tools into the daily work flow.
Also on the radar: becoming TRID compliant on October 1. Another goal accomplished.
“As we continued utilizing the tools, we could see that they worked and could make our lives easier,” McGrath says. “What we found is if we embraced the technology and utilized it to the fullest, it would actually help us be more productive.”
Handling Loss Mitigation
MidWest Loan Services, a Fannie Mae approved servicer, was already handling loss mitigation for First Heritage.
And loan quality has never been higher – even with the growing volume, McGrath says.
Tools like the Uniform Collateral Data Portal® (UCDP) and CU simplify the review of appraisals and allow staff to analyze information from a new perspective.
“Our staff is gaining experience because they’re seeing data in a different way,” McGrath says.
“Because they’re using Fannie Mae technologies and guidelines, they are manufacturing quality loans,” Keasel adds. “They’ve had very few data validation errors, and an extremely low number of repurchase requests.”
Unique Market Perspective
First Heritage, which has been working with Fannie Mae since 2002, is a unique partner because of its best practices and extensive reach. As a CUSO, First Heritage currently provides services to 84 credit unions and its products have an impact on more than 1 million members in Pennsylvania and the surrounding markets.
American Heritage Federal Credit Union (FCU), Service 1st FCU, Erie FCU, and People First FCU own First Heritage. While the CUSO is not a huge lender, it’s extremely nimble. With an open, collaborative culture, it provides a good example of how innovation among credit unions can change the competitive mortgage lending landscape.
“To compete in the constantly changing mortgage lending arena, not only today but in the future, it is imperative to focus on all innovative opportunities that exist,” Giordano says. “Technology is a primary tool in the architecture of any mortgage lending model that can adapt, withstand, and expand to service the needs of our members.”
“Fannie Mae’s approach and collaboration in integrating their tools will be a true advancement for any lender that wishes to be more efficient,” he adds.
Karen Nielsen is a freelance writer based in Dallas.