How Home Valuation Tools Can Educate (And Delight!) Credit Union Members

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It’s not easy to satisfy the modern consumer, whose financial literacy and ability to manage checking and savings accounts has progressed exponentially in the past couple of decades. Kids who learned how to balance checkbooks on paper in middle school are now adults who use apps to check balances, deposit checks, split payments with friends, and trade stocks. But that technological literacy doesn’t mean that today’s consumers are willing to forego face-to-face interaction and a high level of service — they expect it in addition to the tech-driven bells and whistles. 

When it comes to banking, a growing segment of customers has chosen the more personal approach that credit unions take to serving their membership. But even service-first models can use technology to extend their differentiation and elevate their customer experience.

Credit unions, more so than the national mega-banks, are committed to keeping their members financially educated and satisfied with their service experience. And credit unions must also ensure that their own data and information is seamless and reliable so they can be confident that any loans issued have appropriate collateral, maintaining their own bottom line.

As a result, credit unions have been at the forefront of providing high-level customer satisfaction, and their members tend to be financially literate and goal-oriented. According to the annual American Customer Satisfaction Index (ACSI) Finance & Insurance Report for 2017, credit union members appreciate the education and background information that credit unions provide when they’re making significant financial decisions. That means leveraging big data to be able to meet members’ needs.

Credit unions hold a special position in this environment. Their heavy focus on customer service and member satisfaction is critical, and their loan standards are flexible enough to accommodate members in ways that other institutions (like banks) often cannot accomplish. Because credit unions do not sell loans to servicers — instead keeping the loan on the credit union’s books and servicing the loan in-house — they have more options when it comes to extending mortgage loans, refinancing opportunities, or home equity lines of credit (HELOCs) to members. And those loans don’t necessarily need to include the standard forms required by most traditional banks (the Uniform Residential Appraisal Report and the Exterior-Only Inspection Residential Appraisal Report are two of the best-known required forms), which means that credit unions can instead rely on data and analytics sources to help them make intelligent loan decisions if that approach makes sense for their operations. 

For example, a credit union with access to real estate analytics can confidently assess that there is a high-price-growth neighborhood surrounding a home where a member is requesting a HELOC (home equity line of credit) for a home improvement project. Analytics can also shed light on how much that home improvement project is likely to increase the value of the home (if at all), giving the credit union — and the credit union member — a better understanding of whether this particular home improvement project will generate any return on investment if and when the homeowner decides to sell, and can help credit unions and members make financially sound decisions surrounding the maintenance and improvement of homes.

HouseCanary’s real estate analytics help institutional investors, lenders, appraisers, and other real estate professionals serve customers and make better financial decisions.

In addition, having web-based and flexible valuation tools on their desktops can help a loan officer make quick decisions while providing the cost efficiency that the membership expects.  If we take another look at the HELOC scenario, imagine it playing out this way for a credit union member with upwards of $100,000 home equity:

  • If they are looking for a $5,000 line, no problem; just pull an AVM and LTV instantly (via API or Match & Append) on the home, and the loan officer can feel confident that the risk is within acceptable boundaries.
  • If they are asking for $25,000, the officer can dig deeper with an online desktop review tool like Value Report where you can play around with comps to get a better understanding of the home’s value and therefore the risk associated with underwriting the loan.
  • If they’re looking for the full $100,000, the loan officer can go to their order management dashboard and request an Agile Appraisal, which includes sending out an inspector to make sure the home is still viable and have an appraiser use their expertise to validate the final value — all for less than $200 in a matter of days, not weeks.

Advances in fintech can provide the detailed information that will best help members, and those are now as accessible to credit unions as they might be for larger institutions, which typically spends more money on data and analytics than a non-profit entity can. Technology products range in price from free to wildly expensive, and modern data and software providers can provide a credit union the balance between finding a budget-healthy option as the fiscally responsible custodian of members’ funds, and finding a secure option that will effectively maintain member privacy and safety. 

And, of course, the data or information source that the credit union leverages needs to include hyper-local insights so that the credit union member with a home in this city and this neighborhood and on this street can actually use the data to make an informed decision about that big financial leap.

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Learn more about using HouseCanary's real estate data to better serve credit union members.