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WASHINGTON – Though Federal Reserve Chairman Alan Greenspan noted that credit unions have traditionally been known for their personal and automobile lending, more are getting involved in first and second mortgages. “With lending efforts focused on consumer and residential mortgage loans, credit unions have a natural interest in the financial health of America’s households,” he said during CUNA’s 2004 Governmental Affairs Conference. “We have a similar interest at the Federal Reserve.” Greenspan explained that households own more than $14 trillion in real estate assets, nearly twice that of mutual funds and stocks. He added that the significant increases in real estate values have mitigated stock market losses and supported consumption for some households. Greenspan noted the rising bankruptcy rates, which have been a thorn in credit union sides, are unusually high, but it is not a reliable measure of the overall health of the household sector or general economic conditions. The primary measure used by the Federal Reserve is the quarterly debt service ratio in combination with the general financial obligations ratio. These rates have remained relatively flat over that past two years at about 13% and 18%, respectively. Greenspan suggested that credit unions and other mortgage lenders provide a wider variety of mortgage offerings, including adjustable rate mortgages to help expand homeownership even further beyond the current 68%. [email protected]

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