TRID Reaction, Mortgage Awareness, And Construction Lending

This week, CreditUnions.com features stories on some of the biggest mortgage topics of 2016, including TRID and growing awareness.

More than 41% of the average credit union loan portfolio is made up of first mortgages, according to Callahan data from fourth quarter 2015. This represents the largest percentage of the portfolio by loan type.

Because first mortgages are such big business at credit unions, this week, CreditUnions.com features stories on some of the biggest mortgage topics of 2016, including TRID and borrower awareness.

TILA-RESPA Integrated Disclosure (TRID) rules and forms went into effect on October 3, 2015, ushering in widespread regulatory changes that have required credit unions to revisit their mortgage origination processes across multiple channels.

TRID replaced four disclosures Good Faith Estimate (GFE), Initial True-in-Lending Disclosure, HUD-1 Settlement Statement, and Final Truth-in-Lending Disclosure with a single Loan Estimate and Closing Disclosure. Additionally, TRID mandated new processes, deadlines, and archiving requirements to create consistency and accountability within the mortgage industry.

In February, Callahan & Associates surveyed 203 credit union executives from 46 states to evaluate the impact of TRID across four categories: (1) the effects of TRID on mortgage closing, (2) the primary causes of TRID delays, (3) the delivery timeline of mortgage disclosures, and (4) the state of mortgage origination operations.

To see the findings of the survey, read The Truth Of TRID by Callahan Senior Industry Analyst Michelle Parker.

Credit unions expanded first mortgages 10.3% to the highest recorded balance of $326.9 billion in December 2015. First mortgage originations accounted for 30.6% of total loans originated in 2015, adding more than $125.8 billion to the loan portfolio throughout the year.

Credit unions sold 38.8% of first mortgage loans originated to the secondary market in 2015. That’s a 5.4-percentage-point increase from 33.4% in December 2014. To see which credit unions lead the industry in mortgage production growth, read this week’s Graphic Of The Week, Leaders In 12-Month First Mortgage Origination Growth by Callahan Industry Analyst Stephanie Clark.

With a footprint that includes four of the 10 most populous counties in Colorado, Ent Federal Credit Union is the largest financial cooperative in Colorado.

At midyear 2015, it was outpacing state- and asset-based peers in 12-month loan growth. It’s portfolio is largely composed of real estate 65.28% as of June 30, 2015 and nearly 7.5% of its members have a mortgage with the credit union.

In this Callahan webinar, Strategies To Make The Most Of Mortgages In 2016, Jon Paukovich, senior vice president and chief lending officer of Ent, discusses how Ent drives awareness among all parties in the home-buying process as well as how it plans to further develop this outreach.

The new TILA-RESPA Integrated Disclosure rule (TRID) has created much gnashing of teeth, but the changes haven’t been gnarly for all.

More than half of the 203 respondents to a Callahan & Associates survey said TRID has added five days to their mortgage turn time, but eight report no added delays at all. Some credit unions said the process has even speeded up.

To see how the experience of two credit unions shows prepping early for the TILA-RESPA Integrated Disclosure form changes paid off, read How These Credit Unions Learned To Love The New TRID Docs by Callahan Senior Writer Marc Rapport.

There’s nothing wrong with a straightforward approach to home lending, as demonstrated by the healthy real estate growth the credit union industry is posting.

At second quarter 2015, total real estate loans many of which were garden-variety conforming and conventional first mortgages totaled north of $375 billion among credit unions nationwide, an approximate 7% increase year-over-year.

In some regions, niche loan products such as construction loans and jumbo mortgages are providing homebuyers with better options to finance their distinct visions of homeownership. Even better, these products often increase the issuing credit union’s return on investment.It’s an exciting time to be a lender, but as the national market rebounds and prices steadily climb, not all members are satisfied with the available home inventory.

Learn how two credit unions developed successful niche mortgage products to satisfy the needs of their memberships in A Home Apart From The Norm by Callahan Associate Editor Erik Payne

Happy Reading!

April 4, 2016

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