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Mortgages and Credit Union Performance: 1980–2011

Mortgages and Credit Union Performance: 1980–2011

Today, credit unions hold a quarter of their assets in residential mortgages, and this report charts mortgage trends from the past three decades, revealing that these loans have persistent positive effects on credit union performance. Among the findings:

  • Credit unions’ direct holdings of mortgages grew rapidly over the past three decades, from only $3…billion…(B) in 1980 to $236B at the end of 2011. During that time, those holdings averaged 14% annual growth.
  • Mortgage holdings grew especially, at about 22% annually, during the 1980s. After the 1980s and until the financial crisis, growth slowed to 11%. From 2008 through 2011, nationally, credit unions still added mortgages at a 4% annual growth rate.

Averaged over the past three decades, individual credit unions that had more of their assets in mortgages had slightly higher returns on assets (ROAs) and higher inflation-adjusted asset growth. And the effects of mortgage share on credit union performance were larger more recently.

The research shows that credit unions holding more mortgages will be, on average, more profitable and grow more quickly.

Tagged: 'mortgage trends' 'credit union performance' 'roa' 'industry growth' 'lending'

Comments on this Report

        Another great report!  Well done! It appears that Credit Unions will need to continue to refine their mortgage skills as the federal government continues to loosen up their grip on the mortgage market.  As Credit Unions are able to take on more of the responsibility, investments in Research and Development of their mortgages, and the employees that work in their mortgage departments, will be crucial.

        It is an exciting time for credit unions as the major banks have taken the biggest hit from the latest financial crisis, as the economy, and housing prices, continue to improve, Credit Unions will be able to take advantage of this opportunity and demonstrate that the common people of the United States are again capable of taking care of their own mortgages and home ownership.

What is your vision of how the Federal Government will ease up on Fannie Mae and Freddie Mac?

Thanks for another great report,

Nate Wentzlaff
Business Analyst
OnApproach LLC
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