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CUNA tells IN.Y. TimesI why CUs aggressive on mortgage loans
NEW YORK (7/11/11)--Credit unions have emerged in the mortgage lending market largely because they could keep on lending during the financial crisis since they didn't get caught up in subprime loans, Credit Union National Association (CUNA) Chief Economist Bill Hampel told The New York Times Friday in an article about credit unions' mortgage lending. The article, "Credit Unions Join the Fray," suggests that credit unions are aggressively entering the mortgage lending area as a good an option for consumers. Hampel noted that from the mid-1990s to mid-2000s, credit unions accounted for 2% of the first-mortgage market, but it more than doubled in 2008-2009 to 4.5%. Credit unions didn't make subprime loans, so when other institutions crumpled under those loans, credit unions kept on lending, Hampel told the Times. In the article, the publisher of Inside Mortgage Finance indicated credit unions have emerged as fairly aggressive because they've decided mortgage loans are a good use of assets. The loans are "an opportunity to help our members achieve the American dream of owning their own home, said Queens, N.Y.-based Melrose CU spokesman Robert Nemeroff in the article. However, the credit union maintains prudent lending policies for a sound mortgage portfolio and a healthy borrowing situation for the member, he said. CUC Mortgage Corp., established by the Credit Union Association of New York, told the Times that New York has seen a 15% increase in mortgage loans, especially to first-time homebuyers. For the full article, use the link.
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