CHICAGO—A new study indicates that CUs have increased their focus on mortgage lending—including attention to non-prime borrowers—more than other financial institutions.
TransUnion research shows credit unions' share of all mortgage originations has increased from 7% in Q1 2013 to 11% in Q1 2015.
While TransUnion data show that credit union mortgage originations decreased 24% between 2012 and 2014, originations have actually increased 35% in the past year (Q1 2014 to Q1 2015). The rest of the market experienced a 48% drop between 2012 and 2014 and only experienced 15% growth in the past year (Q1 2014 to Q1 2015).
"Mortgage originations had declined substantially across the board in the last few years; however, the decline had been less dramatic for credit unions," Nidhi Verma, director of research and consulting in TransUnion's financial services business unit, told MarketWatch. "In the last year alone it appears significantly more credit union executives are seeing growth in this area. Credit unions are becoming bigger players in the mortgage loan market, something that may serve them well in the future as the housing market continues to recover."
TransUnion also found that credit unions experienced 25% growth in non-prime mortgage originations in Q1 2015 while the rest of the industry grew at 4%.
"As the U.S. economy continues to recover, non-prime mortgage originations are growing for both credit unions and the rest of the industry," Verma told MarketWatch. "Historically, credit unions have seen lower delinquency rates than the rest of the industry, and their focus on membership expansion makes them well-positioned to take advantage of this growth."