Credit Union Leaders in Adjustable 1st Rate Mortgage Originations

As a result of the rising interest rate environment over the past two months, mortgage refinancing volume has declined over 75% according to the Mortgage Bankers Association. With first mortgage lending and refinancings being the leading driver of credit union loan growth over the past two years, credit unions will need to begin to examine alternatives to long-term fixed rate mortgage products for members in order to sustain the strong loan growth in the business.

 
 


As a result of the rising interest rate environment over the past two months, mortgage refinancing volume has declined over 75% according to the Mortgage Bankers Association. With first mortgage lending and refinancings being the leading driver of credit union loan growth over the past two years, credit unions will need to begin to examine alternatives to long-term fixed rate mortgage products for members in order to sustain the strong loan growth in the business.

Some credit unions are now increasing their focus on adjustable 1st rate mortgages, a product that is more appealing to members because of its lower monthly payments. With consumers changing homes every seven years on average, the product is a better fit for members. Adjustable mortgages are beneficial to an asset liability management standpoint since it removes a long-term fixed rate asset from the balance sheet- particularly important in the current low interest rate environment.

Below is a list of the top 25 credit union lenders in adjustable 1st rate mortgage originations. Nationally, adjustable rate mortgage originations have represented approximately 15% of all mortgage originations in 2003. These 25 leaders are well above average not only because of their size, but also because of an increased focus on the product. With percentages over four times the national average, the top four credit unions show that focusing on this product is benefiting both the credit union and the member.

 

 

 

Sept. 8, 2003


Comments

 
 
 
  • The adjustable rate product has a definite place in the credit union product offering and should be used more often.
    Anonymous