Perhaps not the biggest secret around, but Nanette Graviet, vice president of public relations, marketing and public relations at Mountain America Credit Union ($4.7 billion, West Jordan, UT) says that the public is still astonished when they find out that credit unions not only do mortgages, but do them better than most lenders.
“Many people don't even know that credit unions do mortgages,” Graviet exclaims. “Mortgage programs and products will vary from credit union to credit union; however, many credit unions have a full-range of mortgage solutions to help purchase, refinance, build or renovate your home.”
Beyond just offering mortgages, Graviet says that last year, Mountain America became the first financial institution in the nation to offer e-closings on FHA and VA mortgage loans, using the Quick CloseSM paperless mortgage process. “Quick Close sends the loan closing documents to you via a secure email link and lets you review the documents in the privacy of your home or office so you can ask questions before the closing.”
In addition to the electronic conveniences, Graviet says that Mountain America simply offers a great product. “Our 100% First-Time Home Buyer loan, with as little as $1,000, first time home buyers can get into a home with no mortgage insurance and a low rate.”
“Additionally, we offer electronic applications, disclosures, and even closings,” Graviet continues. “This secure process is a huge time-saver for borrowers, realtors and escrow officers and has the added benefit of going green.”
Another benefit to borrowing from a credit union is that credit unions often keep more of the mortgages they originate than other financial institutions. “This allows for more flexibility when extending mortgages to creditworthy borrowers who may not fit neatly into conventional lending guidelines.
Overall Graviet says, “Credit unions are an excellent choice for mortgage financing for a variety of reasons: low mortgage rates, low or no fee loan products, and in additional to all of the products offered on the market, credit unions also have niche offerings to include first time home buyer programs with no private mortgage insurance, construction loans, reverse mortgages and home equity loans.
A recent TransUnion report shows that the credit union share of all originated mortgage loans in the market rose from 7% during first quarter 2013 to 11% first quarter 2015.
TransUnion surveyed 90 credit unions and found that six out of 10 participants said that mortgage loan originations have grown over the last two years.
"Mortgage originations had declined substantially across the board in the last few years; however, the decline had been less dramatic for credit unions," said Nidhi Verma, director of research and consulting in TransUnion's financial services business unit in a release. "In the last year alone, it appears significantly more credit union executives are seeing growth in this area. Credit unions are becoming bigger players in the mortgage loan market, something that may serve them well in the future as the housing market continues to recover."
Points of interest from the TransUnion report include:
Credit union mortgage originations dropped 24% from 2012 to 2014
Although credit union originations declined, the rest of the mortgage market dropped significantly more, by 48% between 2012 through 2014
Credit union mortgage originations grew 35% from Q1 2014 through Q1 2015
From Q1 2014 through Q1 2015 the rest of the mortgage market only increased 15%
Non-prime credit union mortgage originations grew 25% during Q1 2015, whereas other lenders only rose 4%
"As the U.S. economy continues to recover, non-prime mortgage originations are growing for both credit unions and the rest of the industry," Verma added. "Historically, credit unions have seen lower delinquency rates than the rest of the industry, and their focus on membership expansion makes them well-positioned to take advantage of this growth."
Summer and early Fall is typically prime home buying time and credit unions throughout the nation report that mortgage originations show a successful season.
"First-mortgage real estate loans were nearly $10.9 billion as of June 30," said Kim Santos, director of the Office of Credit Unions in the state of Wisconsin. "That's an increase of 9.4% compared to June 30, 2014."
“That was one of the major drivers for us," said CEO Jim Henderson. "We're seeing lower delinquency, and that's allowed us not to have to reserve as much for loan allowances and also to invest back into the credit union and other services." He added that the home purchase market made standout increases, especially during second quarter.
Other growth indicators include State Employees’ Credit Union ($25 billion, Raleigh, NC), reporting a mortgage loan portfolio increase of $5.7 billion since 2005 and a 40% mortgage loan volume rise this year alone for Grow Financial Credit Union ($2 billion, Tampa, FL).By Gina Ragusa