COLORADO SPRINGS, Colo. — Ent FCU has seen its "plain vanilla" portfolio remain rock solid with 30-day delinquencies well under 1%, but agency paper is beginning to show serious cracks.
Chief lending officer Bill Vogeney said delinquency rates for agency loans are four to five times higher than their standard mortgages. In the case of VA loans, that is something Ent had not experienced in prior recessions. "A lot of folks in the military will buy a house and then three years later move on to their next station and buy another house there, so you may have a couple with several homes across the country."
But with almost no buyers willing to pay what those military members did just a few years ago, homeowners are faced with the stark realization that they cannot pay for their new homes.
FHA loans are becoming increasingly popular, Vogeney said, but are seeing similar delinquency rates to VA loans in Ent's portfolio. While the risk can be hedged with government insurance and solid servicing, there is some concern over these loans' default rates on a systemic level. "FHA loans have become very, very popular. You wonder if this is going to be the next time bomb," Vogeney mused, before adding, "If a borrower just isn't ready I think we'll have that conversation but we're not in the business of discouraging borrowers-we're in the business of determining if they can borrow and assist them."
