TEMPE, Ariz. — The mortgage turmoil is giving credit unions fresh reason to give portfolios new scrutiny on what they contain in light of the prospect for higher delinquencies and foreclosures, NCUA’s top Western states regulator said last week.
“All credit unions need to be prepared to talk to their members, their front line tellers, board members and the press about the products they provide,” said Melinda Love, NCUA’s region five director.
Love said the “cascading events” in the mortgage markets of the last month have created new urgency requiring CU managers “know if they have subprime, Alt A, or nontraditional mortgages on the books and for their HELOC programs they need to know what the first mortgage looks like.”
This is not something new, she said, since the agency has been harping on this topic “for the last few years”, but now the potential exists that even without real estate loans at risk “some members may default on car and credit card loans as they try to pay higher mortgages.
Recent developments in the markets “appear to be having a cascading effect as one event plays off another, which makes it more and more imperative that credit unions be prepared from an operational and public relations standpoint,” she concluded.
Love, who made her comments in connection with articles on NAFCU awards, serves, as NCUA regional director for a 13-state region from Alaska to Arizona and including Guam.