LERETA recently attended and sponsored the FICS 39th Annual Users’ Conference in Frisco, TX, where industry leaders came together to discuss the evolving mortgage servicing landscape. Through sessions and conversations with attendees, several themes stood out.
Credit unions have been steadily gaining ground in mortgage lending. Over the past five years, their refinance loan share increased from 9% in 2020 to 16% in 2024. As portfolios grow, the question of who services those loans becomes increasingly strategic.
Credit unions tend to approach that decision through a relational lens. Their members are their neighbors, friends, family, and community. That mission shapes every operational and technology decision they make.
Here are some key takeaways Morgan Klabenes, SVP of Sales Strategy and Solutions, and Caryn Wyatt, SVP of Client Success, gathered from sessions and conversations throughout the event.
The Case for Bringing Servicing In-House
More credit unions are reconsidering whether mortgage servicing should stay in-house. In-house servicing creates additional revenue streams through servicing fees and ancillary products. According to the 2024 MBA Servicing Solutions Conference, 19% more companies that retain servicing revenue are profitable compared to those that do not.
Beyond the financial benefits, this is often a mission-driven decision. Credit unions are unlikely to sell mortgages to another company for servicing, and members notice. They don’t want to be handed off to a faceless servicer. They want to work with someone who knows them and understands their community.
The Digital Experience Gap
Credit unions know their members expect modern, intuitive tools, and they feel the weight of competing with large banks and fintechs that have significantly greater technology budgets. Despite having fewer resources, they are unwilling to accept a second-tier member experience.
Borrowers still value the trust and personalized guidance credit unions provide. The focus is on integrating automation in a way that enhances, not replaces, the human touch.
They are actively seeking technology partners who can help close the digital gap without requiring enterprise-level IT teams.
The Staffing, Training, and Partner Investment Challenge
The biggest friction point for credit unions bringing servicing in-house isn’t ambition, It’s capacity. New hires in compliance or default management roles can require up to 90 days of training. For smaller credit unions, limited training budgets often leave teams underprepared to handle complex tasks like loss mitigation or foreclosure timelines.
One theme came up consistently throughout the conference: credit unions aren’t just shopping for software. They’re looking for a partner who stays alongside them through implementation, help train new employees, and remain a steady presence as they build out servicing operations.
This is why LERETA is expanding its commitment to client education by introducing new webinar series and increasing online learning tools available to all clients. These resources give credit union teams accessible, on-demand support to onboard faster and build lasting internal expertise. A vendor’s willingness to invest in a credit union’s team has become a deciding factor in who earns the business.
Built for the Credit Union Market, Not Retrofitted
Solutions built for credit unions are fundamentally different from those adapted from other market segments. Credit unions recognize that difference right away. They are looking for partners who understand the cooperative model, the member relationship dynamic, and the operational realities of institutions that prioritize people over profit margins.
LERETA is actively enhancing its existing interfaces to increase automation across tax and flood servicing workflows. This reduces manual touchpoints, improves accuracy, and frees staff to focus on the member relationships that define the credit union experience.
These enhancements are designed specifically for the credit union market, not added as an afterthought to platforms built for large banks or independent mortgage bankers.
The Subservicing Reality for Smaller Institutions
Despite the member experience and revenue benefits of in-house servicing, outsourcing is still a practical option for many credit unions, especially smaller institutions.
It is not uncommon to see savings of over 50% when using subservicers compared to servicing in-house. Compliance complexity is also a significant factor driving that decision.
CUSOs offer a middle path by helping credit unions collaborate, pool resources, and access services that might otherwise be cost-prohibitive. This allows institutions of all sizes to compete more effectively.
Bottom Line
The trend toward in-house servicing is deliberate and values-driven. Larger credit unions are retaining servicing for MSR income and relationship continuity, while smaller institutions continue leaning on subservicers and CUSOs to manage cost and compliance.
Across the conversation, one thing became clear: Credit unions are not chasing efficiency for its own sake. They are focused on delivering an experience that reflects the trust their communities place in them, whether that interaction happens digitally or in person.
LERETA is committed to being that partner. One that shows up with purpose-built automation, expanding educational resources, and a genuine understanding of what makes the credit union market unique. In a landscape full of solutions not designed for this segment, that focus is not a feature. It is the foundation.
