CUs Fear NCUSIF Premium Impact
That's the findings of a survey that NAFCU took for its March Flash Report.
NCUA's decision to levy a premium has caused 70% of credit unions surveyed by NAFCU to adjust their growth predictions downward.
According to the report, 97.7% of those surveyed said their predictions for net income growth had been affected by the premium announcement, and 2.3% said their prediction on asset growth was affected.
The NCUA plan to stabilize corporate credit unions, which was approved two days after U.S. Central announced it was expecting a $1.1 billion loss for 2008, involved a $1 billion capital injection into U.S. Central and a guarantee of all deposits by natural person credit unions in corporate credit unions.
The agency has projected that the average cost to credit unions will be a 62-basis-point return on assets and a 56-basis-point return on net worth ratio.
NAFCU's survey found that 80.6% of respondents were expecting a decline in net income growth this year, 14.9% were expecting an increase and 4.5% expect no change.
On asset growth, 34.3% expected an increase, 34.3% expected no change and 31.3% expected a decline.
A plurality of respondents expected a decline in loan growth this year.
The NAFCU survey found that credit unions were most likely to talk to members about the premium assessment via letter (34.3%). Other methods of communication cited included a pamphlet (20.9%), e-mail (19.4%), personal visit (11.9 %) and phone call (11.9%).The projections of tough times ahead come in the wake of mixed results in the last few months, for the credit unions surveyed.
Share growth increased 1.8% in January, up from 0.5% in December. NAFCU projects overall share growth for 2009 will be 6%, compared with 7.7% last year.
Among survey respondents, first-mortgage lending grew 0.08% in January, compared with 0.4% in December.
Month-to-month new vehicle lending decreased by 0.03% and used-vehicle lending increased by 0.04% in January, according to the Flash Report.
Mortgage Documentation Firms Partner
Electronic mortgage documentation provider SigniaDocs and electronic notarization firm World Wide Notary have partnered, integrating their platforms to support their eSignatures and eNotarizations products for any mortgage document or document set. The resulting blend of capabilities allows mortgage transactions remain electronic from start to finish.
Using the Houston-based SigniaDocs' eVault service, documents that are traditionally "papered out" and laboriously reviewed during the closing process are now available in advance of closing. Borrowers can review and click-to-sign the majority of documents at their leisure. Those requiring notarization are passed to World Wide Notary's DigaSign system to complete the documents.
After the closing is complete, lenders and title companies are notified, the eSigned and eNotarized documents are deposited into the lender's eVault, and the eNote can be registered to the Mortgage Electronic Registering Service for transfer to investors.
"DigaSign's latest release also supports the ability for mobile notaries to go virtually anywhere, even without an internet connection, to eSign and eNotarize documents in an offline environment and then upload them later," said Sheila Hemphill, vice president of sales for the Vernon, Texas,-based World Wide Notary.
"Adoption of eMortgages has been slow because borrowers are inconvenienced when asked to do some documents electronically and still have to paper-out and ink sign others with a notary," said Tim Anderson, president of SigniaDocs.
"This has been referred to as a 'hybrid' eMortgage because most systems today still do not support eNotary. Now we can keep virtually all the documents and processes totally paperless and deliver the same customer experience to the borrower, from eDisclosure to eClosing," he added.
Anderson added that for jurisdictions that support eRecording, lenders never have to paper-out any documents. The legal version can be retained in SigniaDocs' secure eVault indefinitely for future reference for reporting, audit requirements, second mortgages or refinances on the loan, or other actions that may be required.
January Housing Starts Increase
According to a March 17 Commerce Department report, U.S. housing starts in January unexpectedly rebounded thanks to a surge in multifamily units like apartment buildings and townhouses.
The 22% overall increase came from an 82% increase in multifamily units, with only a modest 1.1% increase in single family homes construction.
However, building permits rose at a slower rate, only 3%, which means actual shovels may be slow to hit the dirt.
Regardless, any increase was received as good news, because a Bloomberg survey of economists had projected a 450,000 annualized decrease in housing starts, not a 583,000 annualized increase, which is representative of January's numbers.
Likewise, permits were forecasted to drop about 3% but instead increased as much.
"You get the sense from a lot of the data coming out now that we're beginning to get to a bottom," said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Mass., in a March 17 interview with Bloomberg Television.