Credit union mortgage originations down 43% from last year

by JON PRIOR

Credit unions originated $31.4 billion in mortgages through the first half of 2010, down 43% from the $55.3 billion completed in the same time last year, according to data compiled for HousingWire from research firm Callahan & Associates.

Credit unions are cooperative financial institutions controlled by its members. The latest total is also down more than 20% from the second half of 2009. According to the research, 82% of credit unions are now in the mortgage lending business. But these companies account for only 3.9% of the origination market share, down from 5.2% last year.

"After a refi-fueled boom in 2009, first mortgage originations are back to historical average levels," according to Callahan & Associates. As a result, "sales to the secondary market have declined in tandem with the origination slowdowns."

By the second quarter of 2010, credit unions sold $15.1 billion of mortgages to the secondary market, less than half of the $30.8 billion sold in the first half of last year.

More than 42% of the $314.8 billion in credit union's real estate portfolio consist of first-mortgage fixed-rate loans. The rest is fairly evenly spread among various other fixed and adjustable-rate mortgages.

The delinquency rate on the real estate portfolios reached 2.03% through the first half of 2010, up from roughly 1.5% last year.

By comparison, the Federal Deposit Insurance Corp. (FDIC) reported more than $258 billion in loans on its insured institutions' balance sheets were more than 30 days delinquent. That's roughly 5.9% of the total loans backed by real estate those institutions hold.

URL to Original Article: http://www.housingwire.com/2010/09/09/credit-union-mortgage-originations-down-43-from-last-year