Credit Unions Take A Big Slice Of The Mortgage Pie

HMDA data shows credit unions are increasing their mortgage market share.
Andrew Bolton

The release of the latest Home Mortgage Disclosure (HMDA) data in mid-September gives credit unions another large data set with which to evaluate their performance. The HMDA data set encompasses all of 2012 and contains 18.7 million separate points of data for more than 7,400 institutions such as banks, credit unions, mortgage companies, CUSOs, and more. It captures approximately 80% of mortgage lending activity across the country, with gaps existing primarily in rural areas.

According to HMDA data, credit unions increased their mortgage market share in more than 58% of all metropolitan areas during 2012. The Quad Cities metropolitan area of Davenport/Moline/Rock Island, IA/IL, led all metropolitan areas with an annual increase of 8.3 percentage points. The Pocatello, ID, metropolitan area came in second with its 7.8 percentage-point increase in 2012 compared to 2011.

Credit unions posted impressive market share in areas all across the country, as the table below illustrates.


National Mortgage Market Share For Credit Unions

Notably, more than three-quarters of the year’s $1.82 trillion in first lien residential mortgage loans were made by CFPB-regulated institutions, which in 2012 included the three largest credit unions, and HUD. The credit union industry’s overall market share by dollar amount in 2012 was 5.38%, a 28-basis-point improvement from 2011. Where credit unions really shined, however, is in the number of mortgages funded. For 2012, market share by the number of mortgages funded stood at 7.71%; that’s an annual increase of 13 basis points.

Data as of December 31, 2012
Callahan Associates |


Generated by Callahan Associates Peer-to-Peer Analytics

Refinancings peaked in 2009. That year, they accounted for 77.6% of all mortgages. In 2011, refinancings accounted for 73.3% of mortgages. In 2012, refinancings ticked back up and accounted for 76.3%. Home improvement loans nearly doubled their share from 2011 to 2012, increasing from 2.7% to 4.9%. Credit unions posted record total loan originations in 2012 and have kept up a similar pace during the first half of 2013. Rising interest rates have started to reduce refinancing opportunities, however, and the Mortgage Bankers Association estimates that only 32% of total mortgage originations will be refinancings by the end of 2014. Many credit unions are now beginning to shift their focus to generating more purchase mortgages.

More Market Analysis

Find HMDA data for all of 2012 in Callahan’s Mortgage Analyzer tool.

HMDA data doesn’t just offer insight into national trends. It also allows credit unions to compare aspects such as pull-through rates against local competitors. During 2012, credit unions originated 60% of the mortgage applications they took. Once they approve an application, credit unions are doing a good job of funding the loans. The credit union application-to-funding ratio in 2012 was 92.8%, that’s one percentage point increase from 2011. HMDA data also provides denial rates and reasons for denial. Credit unions denied 16% of applications in 2012 for varying reasons, including lack of collateral, high debt-to-income ratio, and insufficient cash.

Pulling out data from the HMDA files is a solid way to build and tweak mortgage strategies, and credit unions can easily evaluate HMDA data through Callahan’s Mortgage Analyzer tool. The depth of the data set provides valuable insight about local competitors as well as your own institution. It even offers the ability to uncover unfamiliar characteristics about a market or discover new competitors. Any credit union with a mortgage program should be aware of the capabilities this data set provides and consider using it as part of a formal program evaluation.

October 10, 2013

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