Dramatic Rise in Mortgage Volume Drives Credit Union Loan Growth

Credit unions experienced a dramatic increase in first mortgage originations in 2001 as members turned to their credit union for both new home purchases and refinancing. First mortgage originations grew an astounding 128% in 2001, rising to $46.6 billion versus $20.7 billion in 2000. An overview of credit union real estate lending in 2001 will be included in the 2002 Credit Union Yearbooks, to be published by Callahans in early March. The table below highlights the leaders in first mortgages as a percent of assets, for all credit unions greater than $50 million.

 
 

Credit unions experienced a dramatic increase in first mortgage originations in 2001 as members turned to their credit union for both new home purchases and refinancing. First mortgage originations grew an astounding 128% in 2001, rising to $46.6 billion versus $20.7 billion in 2000. An overview of credit union real estate lending in 2001 will be included in the 2002 Credit Union Yearbooks, to be published by Callahans in early March. The table below highlights the leaders in first mortgages as a percent of assets, for all credit unions greater than $50 million.

Although a large portion of the 2001 mortgage lending activity was related to refinancing, first mortgage loans posted the highest balance sheet growth of any loan category in both percentage and dollar terms, rising 17.4%, or $13.5 billion, to $90.8 billion outstanding. First mortgages now account for 28% of all credit union loans, up from 26% at year-end 2000. The combined outstandings in first mortgages and other real estate loans (home equity lines and second mortgages) at year-end 2001 make real estate loans the largest segment of the credit union loan portfolio at 41%. This is the first time this category has surpassed auto loans, which now comprise 39% of the portfolio.

The increase in dollar volume of first mortgage originations was almost matched by the increase in the number of loans originated, which rose 97% to over 420,000. Credit unions employed a variety of tactics to handle the increased activity, from short-term solutions such as temporary staff increases to longer-term structural changes such as automation of key steps within the mortgage lending process. The wide array of solutions have credit unions asking each other 'How did your credit union handle these challenges?'

We would like your credit union's help in answering this question and benchmarking the industry's performance in this remarkable year. Our 2002 Survey of Credit Union Mortgage Programs is designed to help credit unions discover better solutions for their first mortgage programs through shared learning.

 

 

 

Feb. 25, 2002


Comments

 
 
 

No comments have been posted yet. Be the first one.