Embrace new opportunities: how banks and mortgage companies can leverage strategic alliances to expand their mortgage lending business.

Author:Hardiman, Dennis F.

The U.S. housing finance industry was significantly crippled after the housing bubble burst nearly a decade ago. The effects of the resulting financial crisis continue to be felt today. The cost to originate is at an all-time high and regulatory guidelines continue to accumulate. In response, many banks and credit unions are exiting the mortgage business, and for good reasons. The rising costs, complexities and risks far outweigh the rewards of offering mortgages--or do they? The housing market is slowly rebounding and demand for mortgage products remains high, with home sales predicted to grow 6 percent this year. In fact, despite a harsh winter that resulted in a slow 2014, the National Association of Realtors[R] (NAR), Chicago, projects existing-home sales to total nearly 5.24 million this year--an increase of 6.1 percent from last year. To take advantage of this demand and remain competitive, banks and credit unions must identify efficient and cost-effective ways to continue offering mortgages to existing and new customers while also continuing to offer other depository services and products. Independent mortgage lenders are only focused on lending and therefore are already at an advantage. For banks and credit unions, lending becomes more complicated and they face a greater risk--losing customers to competing financial institutions that may begin cross-selling depository accounts and other products and services.

Rockland, Massachusetts-based Rockland Trust recognized this conundrum. With $6.9 billion in assets and 86 branches across Massachusetts, the bank decided to form a relationship with national lender Embrace Home Loans, Newport, Rhode Island. The bank contracted with Embrace to help expand its lending operations.

As a result, Embrace Home Loans now processes, underwrites and closes mortgage loans originated by Rockland Trust, enabling the bank to increase its competitiveness as the demand for home financing grows. Rockland Trust solely focuses on bringing in business and no longer worries about its capacity to process, underwrite and close the loans, which can slow down the entire process and tarnish customer service.

Rather than slowing the process, Rockland Trust is able to close loans in seven business days by leveraging Embrace Home Loans' vast experience and its Quick Close 7 process, designed to help customers close when they want to and as fast as they need to.

Quick Close 7 is a distinct process to clear a borrower to close in seven business days after a complete application is uploaded to Embrace's system. To do so, Embrace Home Loans developed a unique system for processing and underwriting, expediting document collection and setting a 24hour turnaround for underwriting.

This--along with keeping everyone up to date on...

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