MADISON, Wis. – Credit unions are going to need a wider array of mortgage products in their arsenal to compete in the emerging purchase mortgage market, and recently announced loan-origination products from CUNA Mutual Mortgage are designed to help CUs reach a wider range of members and meet their diverse marketing needs. "Historic boiler plate, slam dunk, A-paper, fixed-rate loans are accounting for a small percentage of member mortgage loan applications," says CUNA Mutual Mortgage VP of Secondary Marketing and Loan Operations Tom Pisapia. "Flexibility and diversity are key to CUNA Mutual Mortgage's product development. We need a wide variety of products for credit unions to be able to offer members." Pisapia said CUNA Mutual Mortgage's product focus "is consistent with what the federal agencies are doing," referring to housing Government Sponsored Enterprises Freddie Mac and Fannie Mae. He explained that Freddie Mac has been speaking on the issue of lenders transitioning from a refinance to a purchase money market and touting products that qualify more borrowers for mortgages. CUNA Mutual Mortgage's new loan options include a No Income/No Asset (NINA) product and a London Inter-Bank Offering Rate (LIBOR) loan. NINA is a fully amortized 15-, 20-, or 30-year loan which doesn't require the borrower to disclose annual income or assets, but only requires them to describe the source of their income. CUNA Mutual Mortgage says this option is suited for self-employed members who have complicated accounting circumstances that would require them to prepare lengthy financial statements, or for persons working on sales commission and others who have variable income. It's also suitable for borrowers who don't want to detail their income or asset holdings. LIBOR is an adjustable-rate loan that can appeal to higher-than-average income members who want a low interest rate on a jumbo loan. Rates are tied to the average rates on Eurodollars traded between banks in England, which can often be lower than U.S. Treasury notes. CUNA Mutual Mortgage said LIBORs can be attractive to members who want to purchase a home for short-term occupancy or those who need additional monthly income for investment purposes. Pisapia explained he envisioned the mortgage market as being like a series of concentric circles. On one extreme, closest to the center, are A and B borrowers. On the farthest circle is subprime lending. He said CUNA Mutual Mortgage's plan is to have a product offering that addresses each series of circles. `We're not that far out on the spectrum yet to address subprime lending, but our long term plan is to continually widen the spectrum of our services," he said. -

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