Have Credit Unions Become Beneficiaries of the Residential Mortgage Bust?

August 3, 2012 | By | Reply More

That may be the case according to a MortgageOrb article, “The Industry’s Next Big Player” by George Yacik*. Yacik cites the following:

  • Credit union share of the residential mortgage origination market jumped from 2.3% in 2005 to an estimated 6.1% in 2011, according to SMR Research Corp
  • In actual dollar terms, credit union originations have gone from $60.4 billion in 2005 to $82.5 billion in 2011, an increase of 37%, while the market as a whole dropped 57%!
  • In number of loans, the credit union market share rose from 3.3% in 2005 to 7.8% in 2011.

As Credit Unions, what do we have going in our favor? The withdrawal of the big banks and mortgage brokers has certainly benefited credit unions.  Yacik adds that credit unions have emerged relatively unscathed from the credit crisis and have continued to produce mortgages at a steady pace. Member trust is also a big advantage. The article quotes Bob Dorsa, ACUMA President, “We’re doing the same thing we did 30 years ago. The banking system still has a lack of trust. Credit unions have maintained that trust, and now that resonates more.”

So what’s standing in our way? Member awareness could be a major hurdle for credit unions trying to build mortgage market share. According to statistics from the NCUA, at the end of 2010 the member-to-potential-membership rate was just 6.6%. In other words, while most Americans are eligible to join one or more credit unions, they don’t know that!

The article touches on other factors either working for or against credit unions including tax exemption and regulation. To read the article in full, please click on the following link:

Special thanks to Mark Skinner of IBM Southeast EFCU for giving us a “heads up” about this article.

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*Yacik, G. The Industry’s Next Big Player?  http://www.mortgageorb.com

Category: creditunion

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