A Look At How Many CUs Are Participating In Secondary Market

ARLINGTON, Va.—A significant number of credit unions continue to participate in the secondary mortgage market, with more than half selling mortgage loans to Fannie Mae, Freddie Mac or both, according to respondents to NAFCU’s latest NAFCU's latest Economic & CU Monitor report.
The Monitor also shows roughly one-third of survey respondents use credit union service organizations or Federal Home Loan Banks to sell mortgages to the secondary market, while 21.4% use private placement.
On average in 2016, the survey found, 22.5% of credit unions' mortgage loans were sold to the two government-sponsored enterprises. However, compared with pre-recession volumes, about 22% of respondents reported selling proportionally more mortgage loans to the GSEs prior to their conservatorship in 2008.
More than 68% of respondents are opposed to the elimination of the GSEs and the full privatization of housing finance without a government guarantee, the survey found. More than 62% favor preservation of an explicit government guarantee, particularly to protect the 30-year mortgage.
"Credit unions emphasized the need for an assurance of continued access to a reliable secondary market in order to serve the needs of their members, noting that the current system is working well," the Monitor noted.
Regarding housing regulation, survey respondents said they'd like to see more CFPB guidance on construction loans under the Truth in Lending Act/Real Estate Settlement Procedures Act integrated mortgage disclosure rule. Almost half of respondents also support changes to the ability-to-repay and the qualified mortgage standards.
The Federal Housing Finance Agency is currently considering chattel loan pilot initiatives for the GSEs. In this month's survey, nearly half of respondents have no objections to the GSEs pursuing these initiatives, but the majority (52.9%) is still unsure about it.
This month's Monitor also noted that the credit union industry ended 2016 with a flourish, as estimated member growth topped 4% and loan growth exceeded 10%.