Access to a liquid secondary mortgage market is vital to the health of credit union mortgage lending, CUNA wrote to the House Financial Services Committee Thursday. CUNA sent its letter for the record of a committee hearing on the Bipartisan Housing Reform Act of 2018.
“Credit unions that sell mortgages into the secondary market do so for a variety of reasons, but often it is a tool to help them manage long term interest rate risk to ensure their sustained ability to meet their members’ mortgage lending and other financial needs,” the letter reads. “Particularly today, with long term interest rates at or near historic lows but expected to rise, access to a liquid secondary market with relatively low transaction costs is vital for the health of credit union mortgage lending.”
CUNA’s letter notes that credit unions are increasingly active participants in the secondary mortgage market, with more than 35% of mortgage lending credit unions selling $50 billion in loans into the secondary market, up from 15% of mortgage lending credit unions selling $4.5 billion in loans into the secondary market in 1997.
CUNA believes a secondary market must adhere to the following principles: