"Our value proposition really came down to one sentence, which is, we want to be known for speed and service using digital tools and technology," said Sorochinsky, who is head of mortgage lending for the $12.1 billion-asset DCU.

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Consumer loan demand has been stifled since the Federal Reserve started raising interest rates in early 2022, and has remained down even as rates have been constant since the middle of last year. Credit unions seeking to boost loan portfolios have increasingly turned to outside help for identifying untapped markets and selling participations to other institutions. 

DCU officially launched the self-service mortgage portal in 2022 after spending a year piloting the platform to fine tune the processes. The digital lending platform, built by the New Jersey software firm Blue Sage Solutions, capitalizes on the credit union's "consumer direct" model by allowing 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 want to apply for, and inputting property details like zip code, anticipated down payment and estimated purchase price, consumers can see the maximum amount they could bid on a property and choose which rates and terms best fit their needs. This phase also allows members to electronically verify their income, employment and other owned assets to support their eligibility. 

During the application process, borrowers concerned about market volatility can lock in their rate using OptimalBlue's rate lock API, for 15 to 90 days. 

Next, DCU will use Blue Sage's integration with the mortgage fintech Optimal Blue's product and pricing engine to order credit reports, validate loan pricing, run the file through Fannie Mae and Freddie Mac and conduct other calculations. A secondary API connection with the information services firm ClosingCorp provides added support by calculating application and appraisal fees as well as generating disclosure agreements for the member to sign.

Members will receive emails or text messages prompting them to proceed to the next steps in DCU's mortgage portal and sign the necessary forms after the initial application is submitted. Once the fees are paid, orders are put in for standard items including title insurance, appraisals and flood certificates, then a second round of confirmation documents are sent back to the applicant for signing.

After signing all the necessary forms, the file is submitted to the underwriting department for further processing — which DCU says can be done in as little as 30 minutes and without the need for a credit union representative. Two-way communication with a DCU mortgage lending officer, processor or closer via a chat function, as well as informational videos, are available to help the member address any issues.

"It doesn't matter what the forces are, recession or high rates or low inventory, we're able to still be successful because we're focusing on speed and service using digital tools and technology," Sorochinsky said. With the addition of the self-service portal, DCU was able to boost lending from roughly $1 billion in mortgage loans when talks began in 2019, to $1.6 billion in 2023.

DCU is among a host of other institutions that have added new technologies in the hopes of furthering membership growth and increasing loan volume.

The $18.5 billion-asset Alliant Credit Union in Chicago, for example, was able to grow core membership by 22% and boost deposits by more than $500 million in a six-month period with the help of the New York-based account opening fintech MANTL's deposit origination system. The Providence, Rhode Island-based Beeline Loans launched an artificial intelligence-powered chatbot to assist during the application process. 

While the forecasted rate cuts from the Fed have yet to be realized, and home values continue to rise, borrowers have remained on the fence towards new purchase or refinancing opportunities. Brief respites from the market have occurred, as mortgage rates decreased slightly towards the end of March.

Debra Shultz, vice president of mortgage lending at CrossCountry Mortgage, said that activity should pick up over the next two years as the signaled rate decreases will give way to lower mortgage rates — spurring current borrowers to refinance for a more favorable level.

"Today, borrowers understand that real estate is a great investment [as] it gives them the freedom to create the home of their dreams, take advantage of tax advantages and build wealth over time," Shultz said. "The opportunity to refinance their loan into a lower rate in the next 1-2 years is a reality."

Experts with Cornerstone Advisors and Datos Insights underscored the importance of proper due diligence when vetting both third-party firms and the products they bring to the table, but equally highlighted the value of exploring new technology.

"This sounds like a no-brainer but despite having system capabilities, many underwriters still manually pull credit and calculate ratios manually," said Eric Weikart, partner at Cornerstone Advisors. "Sometimes, this is due to system setup issues but many times it's because they have always done it that way and they aren't willing to change."

Automation is an important characteristic for underwriting programs to be truly effective, but only with "comprehensive risk assessment, regulatory compliance and clear guidelines" also put in place, said Stewart Watterson, strategic advisor for Datos Insights. 

As consumer expectations for what the banking experience should entail continue their evolutionary arc, institutions will continue adapting the next generations of technology to meet those needs.

"Compared to 20 or 30 years ago, borrowers have a much higher expectation of speed to approval and closing along with desire to have a tech enabled process supported by knowledgeable, professional loan officers and operations personnel," said Christy Soukhamneut, chief lending officer for the $4 billion-asset University Federal Credit Union in Austin. "We are actively implementing mortgage technology that is user friendly and intuitive so that our sales teams can focus on the member and referral partner experience."