Tuesday, September 2, 2008

Bankrate.com reports credit unions are strong

photo by lord_bute
This weekend I had a nice opportunity to spend time around a backyard campfire with some former credit union colleagues. It was fun to just sit under the stars and listen to the crickets play their background music, but inevitably conversation had to turn to the common denominator between us--credit union business. As in any business there is always that struggle to market services and get more customers. But for once the old school way of credit unions is getting attention. Today Bankrate.com is running the headline Credit unions weather tough market. And just as my friends and I were discussing part of this is because of the way credit unions handle mortgage loans.

Here's what Bankrate.com had to say:

Data from the Credit Union National Association, or CUNA, a national trade association serving credit unions, show some interesting numbers at a time when the financial markets were struggling.
  • Fixed-rate first mortgages increased $6.3 billion (annualized rate of 24.21 percent) during the first quarter 2008 compared with same period in 2007.
  • Adjustable-rate first mortgages increased $2.3 billion (annualized rate of 12.04 percent) during the first quarter 2008 compared with the same period in 2007.
  • Aggregate loan delinquency decreased slightly from 0.93 percent to 0.91 percent of total loans outstanding.
  • Delinquent real estate loans in federally insured credit unions increased from 0.67 percent at year-end 2007 to 0.70 percent through first quarter 2008.

"For the first three months of 2008, loan originations by credit unions went up dramatically vis-à-vis where they were historically," says Walter O'Haire, senior analyst in the banking group at financial consulting firm Celent. "The large lenders still dominate, but credit unions went from having less than 2 percent of the first-mortgage market share to over 3 percent versus the first quarter of 2007.

Here's a summary of some of the things my friends said:

It's harder to get a mortgage loan now that banks have tightened up their policies...credit unions have always been more careful about who they give loans...people are finding credit unions are easier to work with right now...credit union mortgages are stable...the financial business is tough all around right now, but credit unions are doing well in the mortgage business...credit unions do have some foreclosures, but they are more rare.

Sorry guys, but anything is fair game for the blog and readers should know that credit union staffers trust in their credit unions.

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