SEATTLE -
Aaron Bresko, director of credit and portfolio management for BECU, said that during 2007, BECU’s closed mortgage loans were 51% purchase loans and 49% re-fis. Currently, the pipeline is 80% re-fis, and activity is triple normal.
“We are borrowing employees from other departments within the credit union that have any type of lending experience, and we cannot hire temps fast enough to process all the refis,” he said. “We are working weekends and evening hours to keep up.”
In Bresko’s opinion, fewer competitors in the marketplace is part of what is bringing the refi boom to the credit union.
“Certainly in the jumbo loan space, there are fewer competitors. A lot of the ARMs people took out several years ago are resetting now, and it is a great opportunity to be able to refinance to a longer-term loan at a lower rate. It is a perfect storm and a good position for us to be in,” he said.
On a regular basis, Bresko said BECU prefers to focus more on purchases because refinances come and go. Still, despite the refi boom, its purchase mortgage volume is about the same or up slightly.
“Slowly but surely, buyers are coming back into the home market,” he assessed. “Throughout 2007, it took a long time to sell a house. Inventory was growing. With rates coming down, and prices coming down in some areas, people are no longer scared to buy. We probably still haven’t seen the last of the price declines, but consumer confidence is getting better.”
BECU has not had to market to drive the refi boom, Bresko said. It has continued its normal name marketing in the Seattle area’s newspapers, and publishes rates in its newsletter. “We haven’t had to advertise re-fis and wouldn’t want to with the volume we are getting. With our name recognition in our local market, some people need to refinance and automatically turn to us. Others don’t need to re-fi, but rates dropped so much, so quickly, it is beneficial for them to re-fi.
“It’s been a crazy last couple weeks,” he added. “We had our low point last week: 5% on a 30-year fixed. A few months ago it was in the mid- to upper-5s. We are making sure to keep focus on purchase activity, which always takes priority, while also accommodating the refi business.”
