Navy Federal Dominates CU Mortgage Lending List

VIENNA, Va.–It’s no secret that Navy Federal Credit Union is the industry’s biggest mortgage lender. But government data for 2015 show the Vienna, Va.-based cooperative to be on the road to dominating credit union home loan finance.

According to Home Mortgage Disclosure Act data that the biggest credit unions were to require for 2015, Navy Federal increased its mortgage lending by a third last year. More importantly, since the national mortgage industry was up by about the same amount, Navy increased its credit union mortgage market share to 11.35%, up a hefty 130 basis points from 2014.

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Navy Federal originated $12.61 billion in mortgages last year, up from $8.3 billion in 2014, when it had a 10.05% share. That’s nearly $10-billion more than the runner up, State Employees’ Credit Union of Raleigh, N.C. SECU stayed flat in originations at $2.8 billion in 2015, but because of the run up at Navy FCU it saw its share decline 80 basis points, from 3.3% in 2014 to 2.5% last year.

Overall, Navy FCU made more mortgages last year than the next five top lenders combined.

Other Leading Lenders

Another military-based credit union, Pentagon FCU, was third for 2015, at $2.4 billion. That was double its $1.2 billion volume in 2014, and as a result the Tysons, Va.-based PenFed jumped four places from seventh in 2014. Kinecta Federal, Manhattan Beach, Calif., was fourth, at $2 billion, flat to 2014, while First Tech FCU, Mountain View, Calif., was fifth at $1.4 billion, also flat to 2014.

Eleven credit unions made more than $1 billion in mortgages, the HMDA data show, and a total of 1,989 CUs reported their mortgage volumes to the Federal Financial Institutions Examination Council, a unit of the Fed and other federal agencies. Credit unions with assets of $44 million or less are not required to file.

The HMDA data for this report come from reports generated through the LendingPatterns database of ComplianceTech, a fair lending and technology firm based in McLean, Va.

The industry as a whole, or at least those required to report, made $111 billion in mortgages last year, a jump from $83 billion in 2014. The money went largely to borrowers identified as white, who received 69% of dollars granted. Minorities received 17.7% of the funds, with Hispanics leading the minority category at 6.6%.

The average loan amount was $192,000 for a first lien, and $48,000 for a second lien.

Upper-income borrowers led with 46% of mortgage dollars last year, followed by middle-income borrowers at 44%. The low- and moderate-income categories combined made up 11% of volume.

Holding Those Mortgages

Credit unions kept the bulk of their 2015 mortgages in portfolio. Almost 62% of production was not sold to investors in the secondary mortgage market last year. Fannie Mae was the largest investor, buying 18.2% of the total. Non-agency investors followed, at 10%.

Credit unions made a fair amount of “jumbo” mortgages last year (mortgages above the limits eligible for purchase by Fannie Mae and Freddie Mac). Jumbo total was 19%, or $21 billion.

Loan purpose was split fairly down the middle last year, as credit unions made 48% of their loans for refinancings and 46% for purchase mortgages. The balance went for home improvement loans.

—Mark Fogarty

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