Credit unions captured a record 11% of U.S. mortgage originations in the first three months of 2015, according to a report from the consumer data firm TransUnion. That represented a four percentage point increase from credit unions' previous first quarter record mortgage share of 7% in 2013, according to TransUnion.

The Chicago-based company revealed the data at its annual credit union seminar in Las Vegas Tuesday.

TransUnion Director of Research and Consulting for Financial Services Nidhi Verma, said the firm's research revealed two important points relating to credit union mortgage data. First, credit unions saw a smaller percentage drop in mortgage lending than other lenders did when mortgage refinancing slowed, and second, credit unions rebounded more vigorously when purchase money lending began to pick up.

The firm's number crunching showed that while overall mortgage originations dropped by 48% between 2012 and 2014, they only dropped by 24% at credit unions. While mortgage originations increased by 15% overall from Q1 2014 to Q1 2015, they jumped by 35% for credit unions.

“Mortgage originations had declined substantially across the board in the last few years; however, the decline had been less dramatic for credit unions,” Verma said. “In the last year alone, it appears significantly more credit union executives are seeing growth in this area. Credit unions are becoming bigger players in the mortgage loan market, something that may serve them well in the future as the housing market continues to recover.”

Verma, pictured at left, also shared data that suggested credit unions have been originating a greater portion of their mortgages to members with lower credit scores or thinner credit files. While mortgage lenders increased originations to borrowers with lower credit scores by 4% in Q1 2015 overall, credit unions increased them by 25%.

“As the U.S. economy continues to recover, non-prime mortgage originations are growing for both credit unions and the rest of the industry,” Verma said. “Historically, credit unions have seen lower delinquency rates than the rest of the industry, and their focus on membership expansion makes them well-positioned to take advantage of this growth.”

Credit union executives who attended the seminar said while they had not made dramatic changes to their mortgage programs to spark the increase, they had taken steps to spread the word to members about their mortgage availability.

At the $2.2 billion, 200,000-member Baxter Credit Union, Vice President of Consumer Lending David Brydun said his credit union had taken a number of online marketing steps to keep mortgages in front of members. They included releasing more notices about mortgages on the credit union's online banking platform and targeting its mortgage communications more tightly to members who were the best prospects.

Brydun also acknowledged that consistently low interest rates and rising home values among members had kept the Vernon Hills, Ill.-based credit union refinancing mortgages longer than other lenders might have.

Stephanie Zuleger, chief lending officer at the $838 million, 97,000-member Y-12 Federal Credit Union, said the Oakridge, Tenn.-based cooperative had maintained a wide variety of mortgage options to attract members, in particular a 0% down, 100% LTV option which, she explained, had been very helpful for sparking conversations about mortgages with members.

“Of course, we underwrite those very carefully, but members hear about that option and want to come in and talk about it, and that gives us a chance to explain the different mortgages available and the advantages a small down payment on the mortgage can have,” Zuleger explained.

The credit union's goal, she added, was to help the member find the mortgage best suited for his or her home buying decision now and into the future.

Transunion also reported the results of a survey of credit union executives in regard to their lending priorities in 2014 and 2015. According to the firm, in 2015, the 90 executive respondents saw auto loans as the greatest opportunity, followed by mortgage loans in second place and credit cards in third place.

Instant Insights /

Credit Unions Score 11% Mortgage Market Share

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