The 100-Years Refinance (exaggeration intended)

Originally posted on

Guest post written by Nizar Hashlamon, EVP, Client Relations, Mortgage Cadence.

Mortgage Cadence, formerly Prime Alliance, is the NAFCU Services Preferred Partner for Credit Union Mortgage Solutions.

My colleagues and I talk frequently about the coming changes in mortgage lending. The 100-years refinance (exaggeration intended) cycle will end this year or next. In its place is likely to be the most sustained purchase-money market since the 1950s through the 1960s. There are signs of this already. One headline last week in Housingwire read ’75% of Americans would rather buy now than later’. No doubt they want to take full advantage of the lowest rates in history before home prices rise too much further.

You know this. Everyone knows this. Helping people finance home purchases for the next decade or so is some of the most rewarding work mortgage lenders will undertake during their careers. Many first-time homebuyers will get their homeownership start in the next few years. Our chances to work with them for a lifetime begin now.

There’s a potentially dark side to the coming market changes. Rates will rise. You know this, too. What you might not have thought much about, however, is how much they will rise or for how long, and more importantly, what will the impact be on your secondary marketing pipeline. Start with this fact: rates today are at their lowest point since 1941. Since 1941 rates trended upward until 1985 when the 10-year Treasury rate peaked above 14%. From that point rates began their downward trend, bringing us to where we are today, back to where we were 70 years ago.

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Credit Unions Calculate Your Member Share

Originally posted on

Guest post written by Dan Green, Mortgage Cadence, LLC.

Prime Alliance, the NAFCU Services Preferred Partner for Credit Union Mortgage Solutions is a Mortgage Cadence company.

Year-end 2012 credit union data was released in the last few weeks. That’s an awful lot like running up and down the streets yelling, “Hey, everyone, the new phone book is here.” But for data nerds generally and these mortgage data nerds specifically, it’s a highly anticipated event. Although trends are trackable intra-year and performance predictions are easy to make, this is when we find out what really happened.

2012 was an eventful mortgage lending year. Credit unions closed $124 billion in first mortgages, the highest amount recorded in the industry’s five-decade home finance history. While dollars lent are good, market share is better. It grew, too, to 7.09%, also the highest it has ever been. If you are keeping score like the two of us have for so many years, this is truly good news. Both dollars and share continue the upward trend that began in 2006.

There are many different ways to look at mortgage lending performance. Total dollars and share of the US market are two broad measures. They are simple to calculate and easy to obtain. The reality is, however, neither tell us much about individual credit union performance, and neither provide a means of judging lending achievement vis-a-vis other credit unions. We think there are four simple ways to do that, too.

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A Once in a Lifetime Opportunity

Originally posted on

Guest post written by Dan Green, EVP, Marketing, Mortgage Cadence

Prime Alliance, a Mortgage Cadence company, is the NAFCU Services Preferred Partner for Credit Union Mortgage Solutions.

The housing market is in recovery; most economists and many of us involved in the industry agree. Low rates are, perhaps, the biggest contributing factor. And they are low. Lowest in history? Pretty close. While doing some research recently, we came across the 140-year history of the 10 year treasury rate. Looks like rates were this low just once during this period, in 1940. Based on the data, it’s safe to say rates really are the lowest in history.

But you knew that. What you might not have known is we – lenders – are having a hard time getting a certain group of homeowners to avail themselves of this once in a lifetime opportunity. Who are they? Why won’t they refinance? Great questions.

First, who they are. According to an article last week on Fortune’s Term Sheet blog, this subset of homeowners dwell in the larger set known as those underwater: those who owe more on their homes than their homes are worth. Plenty has been written about them. Even more has been done to help them. The Home Affordable Refinance Program, HARP, was created in 2009 and revamped in 2011 to save them hundreds of dollars per month, thousands per year. Yet, according to last week’s article, only about 25% of HARP-eligible borrowers end up refinancing.

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Three Factors for 2013’s Mortgage Market

Originally posted on

Guest post by Dan Green, EVP, Marketing, Mortgage Cadence

Three factors will heavily influence the mortgage market during 2013. Two of them are immensely positive for credit unions and for our industry overall. The third is a reflection of the mortgage market generally, and, when seen in a certain light, is positive as well.

Factor One – Refinance

Yes, refinancing will continue in 2013. The Mortgage Banker’s Association’s (MBA) January forecast is bullish through the first half of the year, less so in the second half. Why? Two reasons.

First, rates remain abnormally low. Homeowners who refinanced last year are refinancing again, perhaps for the last time. Ever. Let’s face it, with a mortgage rate in the mid- to high 3% range, why would any homeowner, unless forced, give it up? Which leads to a sobering fact: many of us may have seen the last refinance wave of our careers. Coping with this eventuality is covered in the second factor.

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Midnight in credit union mortgage lending

Guest post written by Dan Green, Executive Vice President of Credit Union Solutions, Prime Alliance Solutions, Inc.

When was the best time in credit union mortgage lending?

If you’ve seen Woody Allen’s latest movie, Midnight in Paris, then you may already know the answer to this question. The best time, of course, is right now.

Sure, we might long for the good old days when there were fewer regulations and credit was easier to access. But back then, there were also far more competitors and far less appreciation of our industry’s mortgage lending philosophy and capabilities.

These days, people are increasingly turning to credit unions for their mortgage needs. The momentum continues to build as negative depictions of Bank of America and favorable portrayals of credit unions in the media have helped spur interest in our direction. Credit unions’ share of the mortgage market now stands at over 6 percent, an all-time high.

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