TheMReport — News and strategies for the evolving mortgage marketplace.
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34 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION The LaTesT credit Unions report drop in loan volume The first-quarter slowdown hit all lenders, credit unions included. M ore than 61 percent of first mortgage loans in the latest re- port had fixed rates. "The continued growth in credit union lending and gains in membership during the first quarter are positive signs," the NCUA Board Chairman Debbie Matz said. "Investing in people and communities will produce dividends for credit unions in many respects, but the higher interest rate environment of late 2013 and the first quarter of 2014 slowed mortgage originations." Matz continued, "To protect the Share Insurance Fund, NCUA continues to closely monitor the risks posed by rising interest rates, long-term investments, and fixed- rate mortgages." The group reported that the pace of mortgage originations slowed in the first quarter, down to $42.6 bil- lion in the first quarter of 2014 from $102.9 billion in the first quarter of 2013. The NCUA attributes the decline to a reduction in mortgage refinancing, saying it "is consistent with the slowdown in the housing market during the quarter." Overall, membership in federally insured credit unions grew by roughly 831,000 in the first quarter of 2014, reaching a new high of 97.1 million. However, consolidation of credit unions continues to increase. "The number of federally insured credit unions fell to 6,491 at the end of the first quarter, 262 fewer than at the end of the first quarter of 2013, a decline of 3.9 percent. The decline is consistent with the trend of the last 40 years, as the consoli- dation of federally insured credit unions continues," the NCUA said. Larger credit unions continued to lead in performance measures, with 445 credit unions holding a combined $751 billion in combined assets, or 68 percent of the sys- tem's total assets for the quarter. Credit unions with less than $100 million recorded higher net worth but lagged in net worth growth, loan growth, membership gains, and return on average assets. citiMortgage ceo Hints at Plans to expand Jane Fraser acknowledges the bank's business is below its natural market share. i n remarks captured by Bloomberg at the Mort- gage Bankers Association's National Secondary Mar- ket Conference in New York, CitiMortgage CEO Jane Fraser said the company is seeking out ways to step up its presence in the mortgage market, focusing largely on the "very important" correspondent segment as other banks struggle against waning loan demand and a stringent credit environment. "We want to grow," Fraser said, adding that Citi thinks its current business is "below our natural market share." Indeed, despite being the third biggest bank in the country by assets, Citi has failed to hold a steady place among the top five mortgage originators. While Citi's interest in corre- spondent lending is a change for the company from the last few years, the bigger news is what it says about investor confidence in buying and holding closed loans, remarked JP Kelly, president of mortgage software provider OpenClose.