The CU Olympics: Quest for Mortgage Lending Gold

All eyes will be on Michael Phelps begins his quest to take home an unprecedented 8 Olympic gold medals. However, the attention of the financial services industry will remain equally glued on the US housing market. Let’s examine 2Q mortgage lending growth among First Look CUs, who will take home the gold?

 
 

As the US turns its attention to the 2008 Summer Olympics this week, all eyes will be on Michael Phelps and his quest to take home an unprecedented 8 Olympic gold medals in different swimming events. As Phelps attempts this historic feat, the attention of the financial services industry will remain equally glued on the US housing market. While many lenders have exited the troubled market, credit unions have an unprecedented opportunity to step-up and responsibly capture a larger portion of mortgage market share.

Although reports of credit condition troubles continue to permeate the industry headlines, preliminary second quarter data shows credit unions actually achieved more lending momentum in 2008 than they did a year ago, particularly in mortgage lending. Credit unions in Callahan’s First Look program reported solid 1 st mortgage loan growth of 17.2 percent over the past year, up from the 11 percent growth rate this group posted at midyear 2007. Other real estate loans grew at 8.9 percent over the past year, compared to 9.5 percent at 2Q 2007. First Look credit unions currently account for $226 billion in assets, or approximately 28 percent of the entire industry. Now let’s have some fun with the data.

First Look CU Mortgage Loan Growth Olympics Compared to Phelps’ 8 Events
So, let's kick off the Mortgage Olympics as we shadow Phelps’s exciting three 'medley' events. These events are tricky because they require the individual swimmer or team to use a sequence of four different strokes over the course of the race. We are comparing these events to three different types of adjustable-rate mortgage products, because those borrowers will progress to different rates over the course of the loan, just like swimmers having to perform different strokes during the course of a 'medley' race.

The standings reflect the top 3 credit unions that have experienced the largest 12-month loan growth in each category. The field was limited to First Look credit unions with at least $20 million in assets & at least $1 million in the specific loan category as of June 2007.

400-Meter Individual Medley Final: Amount of Adjustable Rate Mortgages Outstanding (>1 Year)

200-Meter individual Medley Final: Amount of Adjustable Rate Mortgages Outstanding (<1 Year)

4x100-Meter Medley Relay Final: Amount of Open-End Adjustable Rate Mortgages Outstanding

Now, let's move on to the US team freestyle relay contests, where the Americans face strong competitors (especially France in the 4x100 meter), but have the chance to come out on top in both contests.

4x200-Meter Freestyle Relay Final: Amount of 1st Mortgages Outstanding (Fixed, >15 Years)

4x100-Meter Freestyle Relay Final: Amount of 1st Mortgage Outstanding (Fixed, <15 Years)

Just like the butterfly stroke requires a swimmer to heave their upper body out of the water, the rate on a balloon/hybrid loan will make a forward adjustment over the term of the loan.

200-Meter Butterfly Final: Amount of Balloon/Hybrid Loans Outstanding (>5 Years)

100-Meter Butterfly Final: Amount of Balloon/Hybrid Loans Outstanding (<5 Years)

The final event is the one that everybody typically thinks of when they envision an Olympic swimming competition – a sprint typically utilizing the classic 'front crawl' stroke. When most people think of a typical mortgage loan, they usually think of a closed-end fixed rate product offering.

200-Meter Freestyle Final: Amount of Closed-End Fixed Rate Mortgages Outstanding

This concludes the First Look CU Mortgage Loan Growth Olympics. We can only hope that Phelps can turn out equally explosive performances as our First Look credit union medalists. Stay tuned for more events, and GO TEAM USA!

Callahan’s First Look program allows credit unions to compare performance data weeks before indusry figures are released by the NCUA. To participate in Callahan’s First Look program, simply email your 5300.xml file to 5300@creditunions.com.

 

 

 

Aug. 11, 2008


Comments

 
 
 
  • I didn''t think Evangelical Christian was that strong at the Butterfly, but that''s the beauty of First Look. Has anyone tested these competitors for performance enhancers like the ones used by Countrywide and IndyMac?
    Bela Karolyi