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By Mortgage Cadence
Credit unions are now recording some of the best mortgage lending results ever. Low mortgage rates are one of the reasons. Stabilizing housing prices may be another. Larger, though, than these two reasons is the pervasive distrust current and would be homeowners have developed for 'traditional' mortgage lenders. How can you blame them? We all know the stories, from investor woes to market throes to borrower foreclosures. What's odd, and strangely in our favor is credit unions aren't truly seen as 'traditional' mortgage lenders, even though we've been in the business since the late 1970s.
Truth be told, credit unions have been and are the most traditional of mortgage lenders. We've eschewed exotic products, elaborate financing schemes and the bait and switch maneuvers so deftly employed by the mortgage brokerage community. While we weren't really content with stagnant, decades-long market share position, we were comfortable in our knowledge that we put members in homes affordably and sustainably. In short, we did the right thing. If that's non-traditional in the eyes of consumers, bully for us. Doing the right thing is now paying dividends.
How long will this light shine on us? How long will this flight to safety endure? Mercy Jimenez, Senior Vice President of Corporate Strategy for Fannie Mae, believes this window of opportunity will last another 18 months. We agree. Plenty more sub-prime and alternative credit ARMs are scheduled to reset between now and 2010. The credit markets continue to adjust their pricing and risk models. Then there's the uncertainty about the economy, with the looming prospect of inflation. Consider, too, that more than one trillion dollars in origination capacity has evaporated in the past twelve months, much of it never to return. Then there's the fact this is an election year. You can see why the rare opportunity we've been presented with remains open to us for the next year and a half.
Eighteen months. Two Summers, two Winters, two Falls. One Spring. Two Thanksgivings, two holiday seasons. An eternity, really. As one of our credit union colleagues reminded us, though, time passes more quickly as we get older. This time will pass us by, too, if we don't act now.
What do I suggest we do? Five things, immediately:
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June 16, 2008
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