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ALEXANDRIA, Va. — An April NCUA guidance letter to corporate credit unions on credit and market value risks of mortgage-backed securities has some corporates touting their safety and ensuring their members they are not at risk from the subprime market.The NCUA letter states that as of yearend 2006, corporate credit union exposure to securities collateralized by real estate totaled 75.34% of all marketable securities. “Problems recently reported with underwriting and servicing of many subprime and nontraditional loans intensify the need for adequate monitoring of MBS by management, since such loans may have been securitized,” NCUA wrote.Corporate One said it wanted to get out in front of any potential concern among credit unions over NCUA’s letter so it sent its own letter to its members outlining its exposure to subprime mortgages.“Corporate One’s overall subprime exposure is approximately 5% of our total investment holdings and many of those issues are insured,” the corporate stated. “We are pleased to report that none of our subprime mortgage holdings currently have any interest shortfall–even under severe stress testing.”Russell Moore, capital market specialist with NCUA, said the letter was not in response to any problems at corporates. “As we all know, suprime lenders have experienced difficulties. We are just basically reiterating what we’ve talked about before. It’s just a reminder to corporates to continue doing what they’re doing,” said Moore.Moore said the 75% figure includes anything that involves mortgages, including asset-backed secured by home equities, etc. He said the 75% figure in the letter was just a statement of fact, NCUA is not saying the number is too high or low.

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