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LATHAM, N.Y. – CUC Mortgage is celebrating. The subsidiary of the New York State Credit Union League reached an important water mark in June – $1 billion in its loan-servicing portfolio – and the company says that puts it in the position to withstand the cyclical ups and downs of the mortgage market. CUC Mortgage SVP and Chief Operating Officer Richard Maxstadt said “the company now has the income stream to carry us through the period. Before we were more susceptible to market cycles, but now we have a better income stream and cushion.” When CUC Mortgage started in 1987, it had four loans to service. By the end of its first year, it had reached $1 million in loans serviced. CUC Mortgages’ current $1 billion mark represents a total of 9,566 loans, including 6,840 loans through more than 150 credit unions, 941 from Fannie Mae, and 795 Federal Home Loan Mortgage Corporation Loans. The loan servicing, explained Maxstadt includes everything from collecting and allocating principle and interest paid on loans, to paying the borrower’s property taxes and insurance on the property. Located in the New York State Credit Union League’s facility and staffed by 40 employees of whom about 13 are responsible for handling loan servicing, CUC Mortgage is owned primarily by the NYSCUL, and to a smaller extent by Empire Corporate Credit Union FCU and other New York State-based CUs. In addition to servicing, the company also originates mortgages for those credit unions that want to offer mortgage services to their members but don’t want to handle the mortgage originations themselves. Maxstadt said CUC Mortgage has handled about 2,500 mortgage originations so far this year. Credit unions may elect to sell the mortgages on the secondary market to Freddie Mac or Fannie Mae, and Maxstadt said about 25% of them are sold to the Government Sponsored Enterprises (GSE). While 75% of the CUs have elected until now to hold their members’ mortgage in their loan portfolio, Maxstadt said he expects they’ll begin selling their loans when mortgage rates go up. Just as credit unions saw their mortgage portfolios grow over the past year due to record low mortgage rates, CUC Mortgage also benefited from the mortgage-conducive lending environment – loans serviced increased 15% and originations went up 50%. Maxstadt said CUC Mortgage hired staff to deal with the increase in mortgage activity, but it doesn’t anticipate laying anyone off once mortgage rates go up enough to slow the flow of loan applications down. CUC Mortgage recently installed Dynatek’s MORvision software which Maxstadt said will allow CUC Mortgage to offer online applications and originations. It’s also looking in to doing e-signatures for mortgage applications. -

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