The first quarter of 2014 saw a growth in the credit union sector. Total first mortgage real estate loans hit $272.6 billion in Q1, up nearly 10 percent from 2013. A “first mortgage” is a type of mortgage that gives precedence to the lender of the first mortgage over any other lender that may be involved in case of default. More than 60 percent of those first mortgage loans had fixed rates, according to the National Credit Union Administration (NCUA).
Mortgage originations were down, however. A mortgage origination is the start of a new mortgage, not the take over of a previous mortgage from another lender or financial institution. When this number drops for credit unions, it shows that less people are creating their mortgage with credit unions, though more may be moving previous loans over to them.
Many attribute the drop in mortgage origination to the high interest rates putting the breaks on the buying season. NCUA Board Chairman, Debbie Matz, said “The continued growth in credit union lending and gains in membership during the first quarter are positive signs. 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.”
In the first quarter of 2014, mortgage originations dropped to $42.6 billion from $102.9 billion a year earlier.
Matz assured that the NCUA is going to watch the situation closely so they can be ready for any problems occurring with rising interest rates, fixed-rate mortgages or long-term investments.
Membership in federally insured credit unions jumped by 831,000 in the first quarter of this year, which has put overall membership at 97.1 billion, the highest it’s ever been.