Credit Unions as Landlords May Increase
Credit unions may find themselves increasingly playing the role of landlord, according to a recent Federal Reserve policy statement and a property management firm that serves credit unions.
The Fed released a policy statement April 5 clarifying its position on the rental of residential real estate owned properties. The Fed doesn’t have authority over credit unions on the matter, but credit unions may be interested to know the paper ominously stated that “with mortgage delinquency rates remaining stubbornly high, the continued inflow of new real estate owned properties–expected to be millions more over the coming years–will continue to weigh on house prices for some time.”
The NCUA “doesn’t want credit unions to be in the rental business,” she said. The federal regulator would prefer credit unions to “fire sale the properties, take your losses and be done with it,” she said. However, given the weak housing market in Flint and the lack of reasonable offers, the NCUA has been flexible with ELGA.
“The sale of properties definitely creates a loss for us, and we have been taking losses to remove them as quickly as we can,” she said. “We would gladly take our lumps if someone would just offer us a reasonable amount of money for them.”