Credit Unions Remain Active in Selling Real Estate Loans to the Secondary Market

First mortgage originations remained strong in the first 6 months of 2005 despite a small decline from this same period last year. Find out what credit unions have done to manage these loans while simultaneously dealing with declining share deposit growth rates and ALM concerns.

 
 

32.1 percent of all first mortgage loans originated in the first six months of 2005 have been sold on the secondary market. While credit unions originated $27.8 billion first mortgage loans, $8.9 billion were sold to other credit unions, government sponsored entities, such as Fannie Mae and Freddie Mac, and other institutions. This was slightly lower than the first six months of last year where credit unions originated $29.9 billion in first mortgages and sold $10.4 billion in the secondary market.

Credit unions have been selling their real estate loans for two reasons. From an ALM perspective, credit unions have continued to sell their first mortgages to make sure that fixed rate first mortgages remain approximately the same percentage of total assets as in the past. Fixed rate first mortgages outstanding composed 12.1 percent of all credit union assets in the 2nd quarter and that percentage has not changed more than a percentage point for the past year. By doing this, credit unions are protecting themselves from having too many low-interest rate, long-term mortgage loans on their books.

With share deposits only increasing by 4.2 percent in the 2nd Quarter, credit unions have had the option of either borrowing money to fund their increasing loan balances or actually selling off their balances. By selling their loans, some credit unions are ensuring that they do not have to worry about finding funds to provide future loans in a period of slow share growth.

Top 10 Credit Unions in 1st Mortgage Resold on the Secondary Market, Year to Date
Data as of June 30, 2005

Rank
St.
Credit Union
1st Mortgages
Resold YTD
1st Mortgages
Granted YTD
Total RE Loans
Outstanding
Total
Assets
1
VA Navy
$1,880,589,322
$2,397,487,299
$7,057,221,607
$25,002,000,850
2
AK Alaska USA
$259,398,389
$329,155,325
$513,545,431
$2,558,660,821
3
CA Evangelical Christian
$208,416,907
$172,873,672
$630,675,998
$720,823,651
4
WA BECU
$170,757,126
$366,214,370
$2,520,343,110
$5,567,764,275
5
WA Washington State Employees
$132,170,119
$51,132,441
$318,506,626
$1,085,156,498
6
CA Wescom
$113,427,876
$219,966,016
$1,218,547,105
$3,083,020,981
7
AZ Desert Schools
$110,300,807
$158,033,675
$800,402,793
$2,417,209,377
8
VA Pentagon
$104,899,208
$666,790,021
$3,582,400,441
$7,974,465,258
9
WI Landmark
$89,963,742
$109,895,908
$368,949,800
$964,104,267
10
UT America First
$89,016,935
$222,482,075
$811,999,039
$3,091,944,810
 

 

 

Sept. 12, 2005


Comments

 
 
 
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