Central Star mortgage unit grows by partnering with other credit unions

07/19/2012 5:00 AM

07/20/2012 7:17 AM

A mortgage and insurance subsidiary started in April 2011 by Central Star Credit Union is finding its niche by partnering with and offering services to smaller credit unions in the state, its top executive said.

Matthew Hamm, CEO of Central Star Financial Solutions, said that since January his firm has cooperated with 14 credit unions to offer mortgage originations and insurance. The partnerships account for about 80 percent of Central Star’s business, with a pipeline of about $6 million in mortgages, he said.

The company has recently brought on a business development and marketing specialist, and next week it will add a second mortgage originator, bringing its employee total to four. At the current pace of growth, the company likely will have to move to a larger office than the one it occupies at Central Star Credit Union’s main office at 9555 E. Corporate Hills Drive in east Wichita.

“That will probably be changing sometime in the next 12 months,” Hamm said.

He said the focus at Central Star Financial will be to add more credit union partners, primarily those with less than $35 million in assets, which typically don’t have the resources to offer mortgage origination.

The company is a credit union service organization, and as such it can offer services like mortgage origination to other credit unions as well as to consumers who aren’t members of a credit union.

Although home sales remain tepid, Hamm said it hasn’t been a bad time to start a mortgage firm. “And the main reason is we’re still in a very large refinance environment,” he said. “We’re locking in interest rates at 2.75 percent for a 15-year-fixed loan.”

The credit unions that Central Star Financial works with are in Wichita, Winfield, Arkansas City, Hutchinson and Topeka.

In the next two years, the company’s goal is to expand its credit union partnerships not only in Kansas but also in Colorado, Missouri and Nebraska, Hamm said.

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