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Its a great year for CU mortgage lending
MADISON, Wis. (1/20/09)--Credit unions may have a great year in mortgage lending, if the end of 2008 is any indication, according to several sources. Even before the current low rates entered the picture, credit unions had seen an increase in mortgage volume, at $56.5 billion for the first nine months of 2008, according to a CU Members Mortgage newsletter cited by the Association of Vermont Credit Unions (AVCU) (Newslines Express Jan. 16.). Compare that to the same period of time from the previous year, and first-mortgage loan volume has increased by a healthy 26%, the company said. In Vermont, credit unions mirrored that first-mortgage growth through Sept. 30, AVCU said, citing data from the National Credit Union Administration (NCUA) 5300 Call Report. "Nearly $90 million in new first mortgages were booked by Vermont credit unions in that time, raising the statewide credit union first mortgage portfolio to more than $580 million," said AVCU. "Add to that an additional $418 million in other real estate/lines of credit, and Vermont credit unions held just under $1 billion in real estate loans at the end of the third quarter of 2008. With rates so low and consumers having apparently lost some faith in giant national financial institutions, this trend shows no sign of slowing down." In Biloxi, Miss., at least one credit union has experienced a significant hike in applications. Keesler FCU said its mortgage applications and inquiries increased 100% during the last two weeks in December--after rates dropped below 5% for a 30-year mortgage. David Dunnaway, vice president of lending at Keesler, told the Sun Herald (Jan. 11), that there's a noticeable rush to refinance, too. Homeowners might want to refinance if they can drop their current rate by 1.25% or more, Dunnaway said, adding they should also consider the costs associated with mortgages, such as title, legal and origination fees, and how long the buyer plans to live in the house. Some members are surprised it is so easy to get mortgages and other loans from their credit union in a tight credit market nationally. Fred White, a member of Niagara County's FCU, Lockport, N.Y., needed a construction loan for the house he's building. He didn't have any trouble getting a construction loan from the credit union. "I told 'em what I needed. They said, 'no problem,'" he told the Union-Sun & Journal Jan. 11). Niagara County's President/CEO Nancy Kasprzak-Whitmore told the publication that getting a loan from a credit union today is about the same as it was before the economy slipped because credit unions "have always been willing to serve members." Credit unions look at what's good for members--sometimes like a parent, she said. Credit unions have made strides in market share, with the industry's share of the first-mortgage market now at 3.9% from 2.5% a year ago, said CU Members Mortgage's newsletter. That "will likely go up in the coming year as consumer awareness of credit unions rise and members continue to rely on the credit unions they know and trust."
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