With first mortgage delinquency rates doubling from 0.68% in 4Q07 to 1.26% in 4Q08, controlling mortgage risk has become a top priority in 2009 for credit unions with a sizable real estate lending portfolio. One tactic being used by credit unions is shocking loan-to-values.
In this excerpt from the recent webinar "Wisely Managing Your Real Estate Portfolio’s Risks and Opportunities," Cris Tiberi of Affinity Credit Union elaborates on how his credit union shocks LTVs. He relies on data & analytic services from First American Corelogic to conduct these stress tests and other risk management processes to stem potential losses.
Also appearing on the webinar was John Cooke of Mission Federal Credit Union. First American Corelogic released a case study on Mission FCU on how they too are employing new practices to stem losses on their mortgage and home equity portfolios.