Secondary Mortgage Market: All Roads LeadTo Fannie Or Freddie

WASHINGTON - (04/21/05) -- A new survey issued Thursday byNAFCU indicates that more than two-thirds of all credit unions lastyear--68%--sold their mortgages on the secondary market, with theend buyer being either Fannie Mae or Freddie Mac. NAFCU's monthlyFlash Report comes at a time when the debate over reform on thesecondary market oversight is heating up and shows just howimportant the two major players in the market are to the creditunion movement. The survey shows that 58% of credit unions areapproved sellers/servicers for Fannie Mae and 30% for Freddie Mac(some using both), with most of the rest of the respondents sellingtheir mortgages to Countrywide, JP Morgan Chase or CUNAMutual--which eventually sell most of their conforming mortgages toeither Fannie or Freddie--or to the Federal Home Loan Banks. Overthe past four years credit unions helped hedge interest rate riskby selling $99 billion worth of first mortgages on the secondarymarket, the vast majority of which ended up with one of thesecondary mortgage market giants. Most credit unions, 61%, saidthey retain the servicing rights on all mortgagesm while 27% soldthe servicing. The remainder sold some servicing.