Credit Unions Selling More of Mortgage Production

An analysis of residential production at 20 of the nation’s biggest lenders indicates that volume during the first-half 2011 was down around 8 percent from the same period last year.

But not so at U.S. credit unions.

A report released Monday by Callahan & Associates indicates that first-mortgage originations at credit unions during the first six months of 2011 were $33.7 billion, 7 percent higher than during the first half of last year.

The increased activity helped push market share for credit unions to 5.7 percent, jumping from 3.9 percent in the first-half 2010 and more than double the share in the first six months of 2005, 2006 and 2007. The share peaked in the first-half 2008 at 5.8 percent.

Including other types of consumer loans, credit union originations were up 10 percent during the same period. It was the fourth consecutive quarterly increase.

The report also found that 45 percent of this year’s originated mortgages were sold by the country’s nearly 7,400 credit unions into the secondary market.

Prior to the recession, however, the share of business that was sold was only between 24 percent and 28 percent.

“The Federal Reserve’s August announcement of a two-year commitment to keep rates low might change the rate of secondary market activity,” Callahan & Associates President Chip Filson said in the report. “But the rate stand-still provides credit unions a unique opportunity to expand balance sheet loans and increase margins due to the stable funding outlook for short-term deposits.”

As is the case with all types of mortgage lenders, credit unions have so far seen third-quarter refinance volume increase.

The report cited $1.4 billion Affinity Plus Credit Union in St. Paul, Minn., which received more than 1,800 new applications within seven days of sending its members an e-mail highlighting its mortgage products.