Northwest Credit Unions Urge Continued Access to Secondary Market
August 6, 2013
August 6, 2013
Both the U.S. Senate and House are considering home finance reform this session. Included is legislation winding down Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac; and replacing them with a new mortgage guarantor, the Federal Mortgage Insurance Corporation (FMIC).
An analysis of first-quarter, 2013 credit union mortgage lending in Oregon and Washington found that 84% of first mortgages were with credit unions authorized to sell on the secondary market. Dan Hein, vice present of finance for the Northwest Credit Union Association (NWCUA) reports that a total of $10.3 billion in loans sold on the secondary market, are still being serviced by the originating credit union.
“That’s a consumer-friendly practice and preserves the local relationship between the member and the credit union,” said Hein. “It is a priority for Northwest credit unions that they continue to have access to the secondary market and are still able to service the loans for their members.”
Carlyn Roy, CEO of Tacoma-based Tapco Credit Union, is serving on a GSE Reform Task Force established by the Credit Union National Association (CUNA). “It is imperative that the outcomes continue to provide secondary market access to lenders of all sizes,” said Roy. “The legislation should support the consumer’s ability to establish or retain home ownership. The secondary market should provide opportunity for lenders to move conforming product off their balance sheet at a reasonable price. The government guarantee is an important component as well.”
CUNA has reputedly urged that housing finance reform preserves the government guarantee and the availability of 30-year, fixed-rate mortgages.
Testifying last month in the Senate Banking subcommittee’s first hearing on housing reform, CUNA Chief Economist Bill Hampel said credit unions would still be able to make mortgage loans without a government guarantee, but not nearly as many as members want.
The GSE Reform Task Force’s role is to provide credit union perspective that helps shape CUNA’s position statements and testimony.
“Committee members represent varied sizes and operational sophistication levels,” Roy said. “CUNA staff has taken this input, seeking clarification when needed, and provided responses and testimony in an effort to ensure the impacts and implications to credit unions and their members are considered.”
The GSE Reform Task Force meets again this month, Roy noted.
The legislation being considered at this time includes S. 1217—The Housing Finance Reform and Taxpayer Protections Act of 2013, and H.R.2767—the Protecting American Taxpayers and Homeowners Act of 2013.
Questions? Contact Lynn Heider: 503.350.2225, email@example.com.