NEW YORK–Inclusiv/Mortgage, a unit of Inclusiv, said it is expanding in several areas, including higher LTV ITIN lending, a third-party origination partnership, and the pilot launch of operations in Puerto Rico.
Launched in 2005, Inclusiv/Mortgage established a secondary market for member credit unions’ mortgage loans to low- and moderate-income members. As of January 2022, Inclusiv's mortgage portfolio is comprised of $20 million in affordable home mortgages originated by 30 community development credit unions across the country, the organization stated.
Inclusiv/Mortgage also reported the approval of more than 54% of otherwise declined home loans through the Second-Look Program.
ITIN 90% LTV Option
Inclusiv/Mortgage said it will now offer approved sellers an outlet for up to 90% loan-to-values on ITIN mortgage loans. Historically, the company noted, lenders have limited financing to no more than 80% of the homes loan-to-value due to the inherent risk of extending credit to ITIN holders. Despite the overall positive performance of ITIN loans, the secondary market has been slow to adjust risk exposure accordingly, Inclusiv/Mortgage added.
"We believe this change in loan-to-values will provide (community development credit unions) an option to help more ITIN borrowers qualify for home loan financing, especially in the current home market where increased prices and low inventory make it difficult for solid borrowers to compete without it," said Inclusiv CFO Eben Sheaffer.
Strategic Partnerships
Inclusive said credit unions that want to provide affordable home loans to members “but are hindered by obstacles that seem insurmountable” can now take advantage of a third-party origination partnership with Credit Union Mortgage Association (CUMA).
“Whether it is the need to offer mortgage loans, complement existing staff, or stay abreast of the litany of complex regulatory compliance – this is where third-party originations can help,” the company said.
"Leveraging the expertise of CUMA backed by our secondary market allows you to grow your mortgage lending volume and reduce or eliminate repurchase and interest rate risk," said Ahmed Campbell, Inclusiv’s director of lending development.
Inclusiv/Mortgage and CUMA will customize an affordable solution for processing, underwriting, closing, and servicing, freeing up credit unions to focus on member service.
Puerto Rico Pilot Launch
During its recent annual conference in San Juan, Inclusiv announced it is expanding Inclusiv/Mortgage operations to cooperativa members in Puerto Rico.
Currently, there are 106 cooperativas on the island, 85 of which are Inclusiv members, according to Inclusiv, which said those members have experienced limited access to secondary mortgage markets and restrictions on retained loan servicing.
Inclusiv/Mortgage reported it is piloting a secondary market program with five cooperativas who have committed to this ground-breaking initiative.
"Strengthening Puerto Rico's network of financial cooperatives is a proven and effective mechanism to support the economic revitalization of vulnerable communities and help them expand homeownership," said René A. Vargas Martínez, Inclusiv's director of the Puerto Network.
Getting to Yes
According to Inclusiv/Mortgage, it has also been working to help CDCUs turn member declinations into approved loans through the Second-Look Program. Since its launch in the summer of 2021, the Second-Look Program has resulted in the approval of more than 54% of otherwise declined home loans from the CDCUs actively participating in the initiative.
"These are loans that would have been turned down based on credit union’s standard underwriting guidelines as well as automated decisions from Fannie Mae Desktop Underwriter and Freddie Mac Loan Prospector. Inclusiv was able to help these applicants achieve homeownership," said Bob Mundy, director of Inclusiv/Mortgage.