RANCHO CUCAMONGA, Calif. — Although credit unions originated very few subprime mortgage loans comparatively with other mortgage lenders, the non-profits might still take an indirect hit as a result of the mortgage industry's woes.
Terrin Mendivil, economist and industry analyst for the California Credit Union League, said credit unions may experience home equity loan losses if the member's first mortgage, financed elsewhere, goes into foreclosure.
"How many credit unions have that exposure? It's uncertain, because the problem could arise from a subprime loan, or just an adjustable rate that the homeowner isn't prepared for," Mendivil said. "Or, say the credit union is holding the second, a HELOC, and the homeowner pulled out all the equity, then experienced a drop in value. Credit unions holding seconds could face many issues, often depending upon the quality of the first."
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
- Exclusive discounts on ALM and CU Times events.
- Access to other award-winning ALM websites including Law.com and GlobeSt.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
