LAS VEGAS — One state's housing boom remains another state's housing bust.
What does it all mean? Credit Union Journal asked attendees at ACUMA's recent annual conference here to describe the state of their local housing market, and what steps they are taking to capture more mortgage share.
Mark Wilburn, SVP-lending/chief lending officer, 66 FCU, Bartlesville, Okla.
Three of our biggest SEGs are Tyson Foods, Conoco-Phillips and the University of Kansas, so we have members from all over the country. We service mortgages in about 40 states, and will originate loans in 30 states. In the late 1980s, our board diversified outside the petrochemical industry. We have different brand names in our different markets: KU CU in Kansas, Conoco-Phillips CU in Houston and 66 FCU in Oklahoma and Arkansas.
In general, our region did not see a housing bubble — other than in some parts of Arkansas — so we didn't have a big crash. We have $500 million in assets, but our total mortgage portfolio is $565 million. We have $400 million in mortgages with Freddie Mac and $165 million on our books. We've used the secondary market for liquidity so we can continue to make mortgages.
We have always been very strong in mortgage lending. As other lenders have exited the market, we've been able to move in. Our net portfolio growth the last two years, from Aug. 31, 2007, to Aug. 31, 2009, has been $94 million, or 24%.
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Marilyn Franklin, loan servicing supervisor, Security Service FCU, San Antonio
Our members are primarily located in Colorado and Texas. The housing market in Texas is faring a little better than in Colorado, but neither one was hit like California or Florida. We've had a pretty good year in 2009, and we hit our annual goal for mortgage loans in September.
We do all types of mortgages, plus construction loans. Our construction loans are doing very well.
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Marvin McBeel, president/CEO, Heritage South Community CU, Shelbyville, Tenn.
Our market only dropped about 6% to 7%. We are in a rural community area. We've always tried to carry out the credit union philosophy of people helping people, so we have about 25% of our mortgage portfolio in low FICO, high loan-to-value people. I worry those people will be cut out of the market the way things are going. They are making their payments-we've had very few foreclosures-but they can't qualify elsewhere, even though the loan is only $80,000 or $90,000, because homes are affordable in our area compared to other states. These are blue collar workers, and manufacturing is closing down in the area. We don't want their homes, so we work with them if there is a problem. The regulators don't like the numbers some of our members have, but even if they can't pay, it won't be disastrous for us.
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Robin Simmons, AVP-loss mitigation and mortgage servicing, Desert Schools FCU, Phoenix
We are putting a lot of effort into mitigation. We are doing everything we can to keep members in their homes and prevent foreclosure. We've been able to help a lot of members, but there are many more asking for help. We are moving employees from other areas in the credit union to do loss mitigation. There is a lot of paperwork and many phone calls to make, so we are having to train people to handle new tasks, but we think that is better than hiring from the outside.
Home prices in the Phoenix area are stabilizing a bit. The real estate market doesn't seem to be getting any worse, which is a good thing, but we think it will be a while before things get better.
We are looking for new mortgages. We have always been conservative in our underwriting standards, but have tightened even more in the last couple years. We have examined which types of loans cause trouble. We are not lending at the same volume as before, when our delinquency rate was a fraction of a percent.
