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WASHINGTON – Mortgage lending has been a boon for credit unions in this tough economic year, and it might get even better with Freddie Mac, CUNA & Affiliates, and CUNA Mutual Mortgage forming a new alliance providing credit unions and their members nationwide access to the secondary mortgage market and up-to-date technology. Qualifying credit unions can work through either Freddie Mac or CUNA Mutual Mortgage Corp. for low-cost access to capital markets and portfolio management expertise, training, secondary market execution, and advertising. CUNA will act as a facilitator and educator in the agreement. The deal was inked at Credit Union House on Dec. 1. This is not the first such deal a government-sponsored enterprise (GSE) signed with a credit union trade association. Fannie Mae made a similar agreement with NAFCU earlier this year. CUNA President and CEO Dan Mica explained that the partnering marries the credit union philosophy with the money of Wall Street. Larry Blanchard, senior vice president of corporate and legislative affairs for CUNA Mutual Mortgage, added that the arrangement would open up Freddie Mac’s capabilities for all credit unions that would not normally qualify to sell directly to the GSE and work to “help the smallest borrower get into a house.” Freddie Mac Senior Vice President of Single Family Lending Dave Stevens said, “The agreement is extremely robust.and it combines the benefits of technology products [with] a variety of service and training.” He added that Freddie Mac will also offer credit unions Web sites to advertise their mortgage lending. Under the agreement, CUNA-member credit unions will receive enhanced access to Freddie Mac through its Loan Prospectorr program and priority status with their partners to create private label Web sites to increase origination and decrease back-office expenses. Additionally, participating credit unions will be provided enhanced options for managing their existing mortgage portfolios. Mica emphasized that the alliance could not come at a better time and that credit unions’ mortgage lending growth has been “phenomenal.” He pointed out that 87% of credit union members have access to mortgages through their credit unions. He noted that first mortgages are the largest portion of credit unions’ portfolios at 28.7%, with used auto loans trailing at 20% and new auto loans at 18%. Mica added that the program is an absolute service to members and CUNA would not make any money from it. According to Stevens, CUNA members will receive three major benefits from the program. First, it can help mitigate interest rate risk, which is particularly important in the current low interest rate environment. Freddie Mac and CUNA Mutual Mortgage will also assist in security, sales, and trading, and, through the agreement, participating credit unions will have access to a “robust” cash window. Many of the details of the program are being kept confidential to participating members. [email protected]

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