NEW YORK (7/14/15)--The New York Times called on CUNA Chief Economist Bill Hampel last week to help illuminate why credit unions continue to win over American consumers, especially in the mortgage market.
In a piece titled “The Appeal of Credit Union Mortgages,” Hampel explains that credit unions increased their share of the mortgage market to 8.3% from 1.9% of all originations between 2005 and 2014.
The article pointed out that one of the reasons why credit unions have been successful, especially during the housing market crash, is because credit unions hold most of their loans in portfolio, meaning “they were able to keep on lending when the big banks pulled back.”
The article further points out some of the special loan programs credit unions offer that take into consideration the specific financial situations of each individual member, such as first-time homebuyer mortgage products that offer 100% financing and an option to borrow additional cash to help pay for closing costs.
Credit unions also have tackled the housing market with flexible adjustable-rate mortgage (ARM) products, The Times found.
“The 5/5 ARM is making a big impact for us,” Don Genevie, senior vice president for real estate and business lending, Grow Financial FCU, Tampa, Fla., told The Times. “We weren’t the first to come up with it, but we were one of the first to jump on the bandwagon with it.”
Others have taken notice of the way credit unions have stepped up mortgage business activity as well.
“Credit unions are doing a better job of reaching out to their members and letting them know that they’re there for purchase mortgages,” Joseph Wiley, OwnersChoice Funding director of loan acquisition, told The Times.
“They (also) can take a look at those borrowers who don’t fit in the Fannie Mae standard underwriting box, and on a loan-by-loan basis, decide whether this is a loan we should be making,” he added.