Credit Union mortgage sales slump


Initial mortgage sales by the credit unions, which contributed to record profits this year, declined in the second quarter.

In the three months ended June 30, credit unions took out $ 81.1 billion in initial mortgages, of which $ 28.5 billion were sold.

The origins are still going up, but in a slower clip. However, sales were down 15% year-over-year and 4.9% year-over-year.

Credit unions held back the percentage of loans sold. They sold 35% in the second quarter, down from 40% in the first quarter to 42% in the second quarter of 2020.

A CU times Analysis of the NCUA data showed that credit unions with first mortgage sales had higher gross income and higher ROA.

Part of this was a function of size: large credit unions offer mortgages and many small credit unions do not.

Higher ROA chart following higher loan sales for the 10 largest credit unions by asset size.

But it also reflected the contribution of mortgage sales to income.

The 1,159 credit unions that sold mortgages in the first half of the year accounted for three-quarters of the movement’s assets and earned 23% of their gross income from the NCUA’s “Other Operating Income” category, which is supposed to show credit unions to show profits on loan sales.

This was offset by 16.3% of gross other operating income among the 3,977 credit unions that did not sell mortgages, most of which did not offer mortgages either.

The credit-selling credit unions sold $ 58.5 billion in first half mortgages and $ 10.5 billion in equity and full sales of non-real estate loans.

Of the 3,036 credit unions that first launched mortgages in the first six months of 2021, only 1,047 sold any amount.

The smallest mortgage seller was Galaxy Federal Credit Union in Franklin, Pennsylvania ($ 59.1 million in assets, 4,773 members). It sold $ 44,800 in the first half compared to $ 1.3 million in origins. It didn’t sell its first mortgages last year.

The top 10 mortgage sellers have included some who are in the top 10 by assets, while others are aggressive lenders who are not in their portfolio.

For example, the top 10 early mortgage sales included the GreenState Credit Union of North Liberty, Iowa ($ 7.7 billion in assets, 303,025 members), which ranked 303,025 members by assets.

The sales exceeded the origination. GreenState raised $ 676.4 million in first-half mortgages in the first half, up 55.4% from the first half of 2020.

GreenState reported Monday that its first-half loans included $ 50 million in home loans to black members, up 67% year over year.

The amount also put the credit union on track to meet its goal announced in January of $ 500 million in mortgage loan loans to minority groups over the next decade to help close the racist homeownership gap in Iowa.

“We are proud to announce that our first results are incredibly promising and we are just getting started,” said President / CEO Jeff Disterhoft.

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