1 Mortgage Metric Sliced 6 Ways (Part 2)

New HMDA data shows how credit unions in different NCUA regions fared in 2016. Up now, loan type.

 
 

How much should credit unions invest in their mortgage lending engine? The answer depends on the market they serve. Activity across the five NCUA regions varies, with credit unions taking advantage of different opportunities in different areas across the country. 

To tease out what's happening in what market, start with HMDA* data.

There are ample ways to slice and dice HMDA data to gain a deeper understanding of the market. Callahan & Associates uses MortgageAnalyzer to analyze how the country as well as individual NCUA regions are performing in the mortgage originations.

Take a look at what the firm discovered about loan types across the country.

Click here to read Part 1 on mortgage originations.

Click here to read Part 3 on loan purpose.

Download PDF

United States

Conventional loans are the primary form of mortgage lending for credit unions. This is true both for raw values and in market share compared to other loan types such as FHA, VA, FSA, and RHS.

Conventional loan balances for all HMDA-reporting lenders in the United States increased 17.6% to $1.7 trillion. Credit unions captured 7.1% of those mortgages last year.

Conventional loans accounted for 77.5% of all first mortgage originations in 2016 across all financial institutions. Within the credit union space, conventional loans accounted for 91.6% of first mortgage originations.

Credit union market share of non-conventional mortgage products decreased 29 basis points despite a $613.8 million year-over-year increase in total originations.

New England

Credit union funding of conventional mortgages in the NCUA’s New England Region increased 19.3% year-over-year to $25.9 billion. Subsequently, market share for 2016 increased 38 basis points to 10.9%. This is the highest credit union market share of any region.

By comparison, banks in the region funded 62.8% of all conventional loans.

Although all states in the region posted double-digit origination growth, Massachusetts and Michigan lead the way with increases of 26.5% and 24.5%, respectively.

Credit unions funded $1.1 billion in FHA, VA, FSA, and RHS loans last year. That’s up 7.0% year-over-year; however, credit union market share for these loan types dropped 17 basis points to 2.6%. Among the region’s financial cooperatives, Vermont credit unions reported the largest annual growth for other mortgage originations — 27.3%.

 

 

Western

Conventional loans comprised 92.3% of the mortgage portfolio for Western Region credit unions in 2016, but despite a 17.3% increase in conventional loan origination balances, market share for that region’s credit unions decreased 29 basis points to 6.3%.

Conventional loan balances at Alaska credit unions decreased 1.2% annually; however, The Last Frontier’s cooperatives still made 29.0% of the state’s conventional loans — the highest of any state in the region.

Idaho reported the largest growth in balances — 31.0% year-over-year.

Credit union funding for other mortgage loan types — such as FHA, VA, FSA, RHS — increased 2.7% to nearly $3.2 billion for credit unions in the Western region. Market share here for these loan types is now collectively 2.1%.

Central

Conventional first mortgage loan originations for credit unions in the NCUA Central Region increased 13.9% and reached $22.3 billion at year-end 2016. Despite the lift, credit union market share for these loans decreased to 6.7%.

Banks, which funded 55.5% of the region’s conventional loans, own the lion’s share of this market. However, credit unions are carving a niche in specific markets. In Iowa, for example, cooperative market share of conventional lending is 22.7% — 7.3 percentage points higher than mortgage finance lenders.

FHA, VA, FSA, and RHS loans make up 7.6% of the mortgage portfolio at Central Region credit unions. This type of lending increased 1.0% year-over-year, and credit unions captured 1.8% of the market in 2016. Iowa, the highest performing state in this region, increased funding of these loans 37.0% to $54.0 million.

Southeast

Conventional mortgage originations were up 19.1% in 2016 at credit unions in the NCUA’s Southeast Region. There, conventional mortgages surpassed $19.4 billion and market share increased 17 basis points to 6.9%. Credit unions in Indian reported the largest market share for the region — 13.3%.

Credit unions across all states in the Southeastern Region reported strong gains in growth rates in conventional mortgage originations. They also posted origination growth in other mortgage loans. Originations for FHA, VA, FSA, and RHS lending increased 15.5% to nearly $2.4 billion. Kentucky credit unions alone expanded their FHA, VA, FSA, and RHS loans 214.1% to $145.1 million. These loans now make up 10.9% of the mortgage portfolio for Southeast credit unions.

Mid-Atlantic

Conventional originations at Mid-Atlantic credit unions increased 8.9% to $13.5 billion as of year-end 2016. Credit union market share there dropped 22 basis points year-over-year to 5.9%.

New Jersey credit unions increased mortgage loan originations at the fastest annual rate — 41.8% — and surpassed $1.5 billion in 2016. However, the state’s cooperatives still turned out the lowest conventional mortgage market share in the region.

Banks were the main source of conventional real estate funding in the Mid-Atlantic Region. There, banks captured 57.0% of the market in 2016. Other mortgage funding — such as for FHA, VA, FSA, and RHS loans — for credit unions in the region increased 5.2% to $2.5 billion. These loan types now comprise 15.5% of all credit union mortgage loans in the region, making them more integral to the credit union mortgage portfolio than any other NCUA region. Credit unions in Delaware and Ohio both posted significant origination growth of other loan types. Funded loan balances for credit unions in those states increased 58.8% and 43.2%, respectively.

Make The Most Of HMDA Data

Leveraging HMDA data, MortgageAnalyzer helps credit unions identify market leaders and analyze their performance against other credit unions, banks, and mortgage lenders.

Learn More

*The Federal Financial Institutions Examination Council released 2016 HMDA data at the end of September. The Home Mortgage Disclosure Act applies to credit unions, banks, and mortgage finance companies that originate mortgage loans and have more than $44 million in assets, and HMDA data sheds light on the mortgage market across states, communities, and neighborhoods.

 

Nov. 8, 2017


Comments

 
 
 

No comments have been posted yet. Be the first one.