FARMERS BRANCH, Texas (9/25/13)--Credit unions in Arkansas, Oklahoma and Texas completed more than $3.3 billion in mortgage transactions during the first six months of 2013, according to the Cornerstone Credit Union League.
During 2012, credit unions in the three-state area wrote nearly $6.2 billion worth of real estate loans, said Rick Grady, league vice president of research (Leaguer Sept. 24).
"Given the increased pace in mortgages, it appears that volume will be surpassed in 2013," Grady said. "This excludes the peak buying months of July and August, data that will be compiled after the close of third quarter. Together, credit unions in the tri-state area manage over $18 billion in real estate loans."
Rick Pustejovsky, mortgage lending manager at FirstLight FCU in El Paso, Texas, told the league that in the past four months, his credit union saw a significant peak in mortgage loan applications.
"With interest rates starting to climb, consumers who have been sitting on the fence are now jumping into the real estate market because they want to take advantage of low interest rates while they're still available," Pustejovsky said.
While the purchase volume has increased dramatically, mortgage refinancing at the $837 million asset credit union has decreased, Pustejovsky said. He noted that this time last year, 40% of the mortgage refinances the credit union made were equity cash out. This year, less than 10% have been equity cash out.
"Property values took a real hit in the economic recession, so using the house as an ATM machine hasn't been an option for many homeowners," he said.
Pustejovsky, who is on the board of the Texas Credit Union Real Estate Network, said real estate lending is an opportunity many credit unions miss.
"From my perspective, more credit unions aren't actively engaged in real estate lending because they don't understand the benefits of offering this service, or they're concerned about the risks," he explained. "The key is having someone on staff who is experienced in handling your mortgage portfolio."
Another challenge is that realtors don't realize that credit unions are in the mortgage business, Pustejovsky said.
"But it's a problem that can be solved," he added. "I spend a great deal of time educating local realtors of what we can offer their clients."
See related News Now story in Market News: "FHFA: House Prices Up 1% In July."