Housing Market Moved From Crisis to Deeply Troubled
This year will go down as the one in which the real estate and mortgage markets in many areas moved from a sense of crisis to one where credit unions began to find a little bit of stability.
First of all, record-low interest rates meant that credit union mortgage programs generally had a steady stream of members seeking to refinance their existing mortgages-historically the strongest part of credit union mortgage lending. On the downside, credit union mortgage programs generally saw the flow of purchase money loans slow to a trickle as the volume of real-estate sales and mortgages remained very low.
Still, 2010 was significantly better than 2009, a fact which was evident at the National Association of Realtors convention in October, which the American Credit Union Mortgage Association attended to represent credit union mortgage lenders.
"Lord, last year was like a morgue," said ACUMA executive director Robert Dorsa of the October meeting. "Everyone was so gloomy and attendance was down."
But this year, by contrast, Dorsa said the National Association of Realtors Conference and Expo was a good deal more upbeat as the real estate industry started to find its footing coming out of the ongoing housing crisis.
Margaret Kelly, CEO of RE/MAX, described how Realtors had begun to adjust to the new normal in the housing market. "The spike up and down in the housing market wasn't normal, so we shouldn't be measuring ourselves against it," she said in a statement from the meeting that the NAR distributed.
Kelly said that despite some challenges there are plenty of opportunities in the housing market, adding that low mortgage interest rates, abundant inventory and stable prices are attracting buyers to the market right now.
"To be successful in the current housing market, real estate professionals need to educate themselves about buying and selling distressed properties and working with investor buyers, who are a significant part of the market," said Kelly. "Education is critical. Real estate professionals should be learning how to handle short sales, how to market themselves and find buyers and to really understand market conditions," said Kelly.
Kelly said she hopes the government will encourage businesses to create more jobs, which is the only thing that will help the housing market fully recover. "Consumers want an instant fix, but we need to be patient," she added.
This mirrored what many credit unions found in the real estate market, that they needed to learn new things and how to make different sorts of loans. After having to complete their first ever foreclosures sometime between 2007 and 2009, many credit unions found themselves in 2010 helping their members negotiate their way through the purchases or sales of foreclosed or short sale homes.
To a lesser extent than the rest of the country, credit unions still had to deal with collections of foreclosed homes on their books and were forced into the property management business. They handled it in different ways. Some detailed a member of their mortgage staff to pick up the property management duties, including paying for training staff. Others outsourced the duty.
The year ended with Memphis Area Teachers' Credit Union rolling out an innovative approach to handling REO that promised to help both the CU and its members looking to buy a house.
The "Home Run" program will allow financially stable members who nonetheless have poor credit histories, an inability to obtain mortgage financing and lack a down payment to purchase the real estate owned by the CU. According to the credit union's September Call Report, MATCU had foreclosed and repossessed on 34 real estate loans worth $1.8 million.