SPOKANE, Wash.–Credit unions in this market say mortgage lending remains scorching hot and they are working on ways to expand home loans to underserved areas.
In an interview with the Spokane Journal, a number of credit unions detailed market conditions and their own efforts to respond.
Troy Clute, senior vice president with Spokane Valley-based Numerica Credit Union’s home loan center, told the Journal low rates have combined with other factors to make mortgage refi’s especially popular.
Clute says refinancing has been an especially busy corner of the market.
“I’ve been doing this for about 24 years, and I’d been through several refi booms, but none hit quite as fast and quite as hard as last year,” he told the Journal, noting that from 2019 to 2020 Numerica’s total mortgage volume grew by about $135 million, or 36%.
But Clute also told the publication he expects to see interest rates rising, albeit not significantly. “In the last six to eight weeks, we have seen rates start to climb a little bit,” Clute was quoted as saying. “We’ve probably seen rates raise about three-eighths of a percent. It hasn’t had a significant impact on production at this point.”
Like markets in much of the country, real estate in the Spokane market has been tight, said Clute.
Volume Expected to Continue
Charlotte Nemec, president and CEO of Canopy Credit Union, told the Journal that because inventory in Spokane’s housing market is so tight and builders can’t keep up with demand, options such as refinancing likely will remain popular.
“I think the refi volumes that are happening will continue for the rest of this year,” Nemec was quoted as saying. “But finding new homes to purchase is such a struggle … I think that could have an impact on volume for those of us that want to help homebuyers who are coming into the market.”
Nemec told the Journal that as home values have risen, many borrowers are pulling equity from their home in order to pay off other debts or complete home improvements.
Nemec said Canopy has been working to find ways to sate demand for housing, including land loans, regardless of the direction rates trend. Some members prefer to build a home from the ground up rather than try to find an existing home in a competitive market.
“There are some good opportunities for us to capitalize on the land loan side of things,” Nemec told the Journal. “It doesn’t have to be developed. A lot of times, lenders will say it has to have water, sewer, and electricity (infrastructure) on the land. We are not requiring that to be the case.”
Creating New Products
Canopy is also is working to create mortgage options, including adjustable-rate products, for those who don’t qualify for a traditional 30-year, fixed-rate mortgage, according to Nemic.
“We’re building out some products in 2021 in the mortgage side of things that won’t be sellable on the secondary markets,” Nemec told the Journal. “What we’re looking to do is find a way to help people get into housing, if they can find it.”
Lindstrom says providing more options for underserved members is becoming of more interest to credit unions.
“We’re constantly trying to figure out a better way to provide access to credit. I think everyone is trying to solve that problem of how to get away from just the classic credit decisions,” Lindstrom told the publication. “There are more nontraditional ways to assess credit that maybe aren’t as marketable. Fannie Mae might not buy that loan, but potentially, as a credit union, we could put it in our portfolio.”