Credit unions’ loan volume was strong through the second half of 2011, according to financial filings from 6,445 credit unions. While consumer lending increased, mortgage lending remained strong. Through the end of 2011, FirstLook credit unions originated $77.6 billion in first mortgages, which accounted for 31.7% of total loan originations in 2011.
Annual first mortgage origination figures for these credit unions have slowed from 2009 and 2010 levels. Despite lower amounts for the full year, the fourth quarter of 2011 was one of the strongest quarters for first mortgage originations for these institutions, with over $26 billion granted. First mortgages accounted for 41.2% of the total loan portfolio for these credit unions as of December 31, 2011. These loans outstanding posted 4.8% growth over 2010 levels.
Credit union managers, in an effort to manage their assets and liabilities, were actively selling loans to the secondary market. Through the end of 2011, FirstLook credit unions reported selling $35.9 billion in first mortgages, or 46.3% of the total first mortgage originations in 2011. This proportion is slightly lower than the 52.0% rate through the four quarters of 2010.
The sales, therefore, understate the 4.8% growth of outstanding first mortgages held by these credit unions. Had FirstLook credit unions retained the first mortgages sold to the secondary market in 2011, outstanding loan balances would have increased 8.9%, significantly higher than the actual 2.1% annual growth rate for these institutions.
The portfolio of first mortgage loans outstanding as of December 2011 largely consisted of fixed-rate loans, which accounted for 60.7% of the portfolio. However, fixed-rate first loans greater than 15 years have reported their share decreasing since reaching an all-time high in late 2009.