Credit Unions Hit All Time High for Loan Originations

May 11, 2012 at 9:39 PM

Credit Unions Begin Boom as They Carve their Own Slice of The Mortgage Origination Pie

Credit Unions are for the first time ever, originating more than 8% of the U.S. mortgages in any given three-month period, according to an analyst at Callahan & Associates.  Previously the highest share credit unions earned was slightly more than 5%.

On Thursday, Lydia Cole, director of industry analysis for Callahan & Associates, said that credit unions have hit the new benchmark.  She made these observations at a CU Mortgage Lending Regional Workshop in Orlando, Florida, sponsored by the American Credit Union Mortgage Association.

The boom begins on the heels of yesterday’s news of a massive $2.3 billion loss by JP Morgan Chase.  This should slow NCUA’s plans to deregulate financial derivatives.  This will allow credit unions more power to enter into alternate financing such as interest rate options, swaps, and other creative financing.

One reason for the solidity of the mortgage market in the credit union space is that many (although not all) of the mortgage loans made by credit unions, are held in their own portfolios.  By not needing to be sold to investors this allows credit unions to stay on course and not be as affected by slight changes in the economy says Bill Hampel, chief economist for the Credit Union National Association and Affiliates.

The consumers are realizing the savings from Credit Unions in addition to being able to refinance their mortgage.  For instance, the Credit Union National Association estimates that Indiana Credit Unions provided over $74K in direct financial benefits to the states 2.2 million member population during the twelve months ending December 2011.