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Credit Unions Originate $95bn in Residential Mortgages in 2009

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The credit union industry originated $95bn in residential mortgages in 2009, taking a 4.5% share of the nation’s total mortgage market. Including the mortgages written last year, the nation’s 7,710 credit unions originated more than $271.9bn in new loans, a 7.1% increase over 2008, according to data released by Callahan & Associates, a Washington, DC-based financial consulting firm that specializes in the credit union industry. As consumer sentiment toward banks continues to diminish, increasingly more customers are turning to credit unions and community banks, including real estate loans. At the end of 2009, the credit union industry held $314.4bn in real estate loans in 2009, up 1.52% from 2008’s origination level. As HousingWire’s previously reported, including a feature in its November magazine, credit unions are seizing the moment to increase market share and expand consumer perception that credit unions aren't just financial institutions that make car loans. According to American Credit Union Mortgage Association (ACUMA) president Bob Dorsa, the association’s membership has set a goal of 10% mortgage origination market share by 2016. Not that auto loans aren’t going away as a bread-and-butter loan product at credit unions. Last year, credit unions held $175.4bn in auto loans, but that is a slight decline, down 1.57% from 2008. In 2009, nearly 20m credit union members took out loans and total credit union loans outstanding set a new high of $580.5bn. Credit unions have increased total loan originations in 64 of the past 65 years, according to Callahan & Associates. And credit unions are showing no signs of slowing down. Navy Federal Credit Union, the world’s largest credit union, with $40bn in assets, said its committed $7bn to originate purchase and refinance mortgages with loan-to-values (LTVs) of up to 100% for its members this year. Last year, Navy Federal Credit Union’s mortgage originations totaled $6.2bn, a new record for the credit union. “Navy Federal has contributed to the recovery in 2009 by extending more than $31.4 billion in credit, more than any other credit union, and is committed to providing even more credit to members in 2010,” said Navy Federal Credit Union president and CEO Cutler Dawson. “We continue to see members doing more and more business with us as a result of our great rates, low fees, lifetime servicing of loans and 100 percent financing available for new mortgage purchases.” The release of the year-end results comes as Raddon Financial Group, a research and data firm in Lombard, Ill., announced the results of a survey it conducted to gauge which financial institutions consumers turn to for mortgages. According to the report, displayed in the graph above, 31% of potential borrowers said they would turn to their primary financial institution for a mortgage, 27% said they would turn to a bank and 17% said they would seek out a mortgage broker. In addition, 13% said they would look to a credit union for a mortgage loan. Write to Austin Kilgore.

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