Credit Unions Gaining Mortgage Market Share

by devteam August 12th, 2015 | Share

Credit unions are gaining a greaterrnshare of the market for both home mortgages and auto loans according to a newrnstudy just released by TransUnion.  Therncredit reporting company says credit unions’ share of mortgage originations hasrnrisen from 7 percent in the first quarter of 2015 to 11 percent in the firstrnquarter of this year.  </p

During a survey of 90 credit union executivesrn60 percent stated that the number of mortgage originations they have providedrnto their members has grown over that two year period and ranked mortgages as a<bprime focus and growth areas for their businesses.</p

Further, TransUnion found that creditrnunions had suffered less and staged a quicker recovery from the severe downturnrnin mortgage originations between 2012 and last year. While credit unions saw arndrop of 24 percent in their originations during that period, the rest of thernmarket fell by 48 percent.  Over the lastrnyear credit union originations have increased 35 percent while the rest of thernmarket is up 15 percent. </p

Nidhi Verma, director of research andrnconsulting in TransUnion’s financial services business unit said, “In thernlast year alone, it appears significantly more credit union executives arernseeing growth in this area. Credit unions are becoming bigger players in thernmortgage loan market, something that may serve them well in the future as thernhousing market continues to recover.” </p

TransUnion also found that creditrnunions experienced 25 percent growth in non-prime mortgage originations in Q1rn2015 while the rest of the industry grew at only 4 percent. </p

“As the U.S. economy continues tornrecover, non-prime mortgage originations are growing for both credit unions andrnthe rest of the industry,” said Verma. “Historically, credit unionsrnhave seen lower delinquency rates than the rest of the industry, and theirrnfocus on membership expansion makes them well-positioned to take advantage ofrnthis growth.”</p

Auto loans have also grown inrnimportance at credit unions.  From Q1rn2014 to Q1 2015 they had a 7.4 percent increase in new auto loans while thernrest of the industry saw a 2.1 percent bump.  Subprime constituted 12.5 percent of their newrnloan originations in Q1 2015 slightly lower than a year earlier.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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