MANHATTAN BEACH, Calif. — Efforts to launch a credit union controlled secondary mortgage market gained a new ally last week, when secondary mortgage market pioneer Jess Lederman joined $4.4 billion Kinecta Federal Credit Union in the newly created position of senior vice president and chief lending officer.

Lederman told Credit Union Times a credit union secondary mortgage market was in the back of his mind when he agreed to the Kinecta post, and said he's looking forward to getting involved in the CU Housing Roundtable-led initiative.

Additionally, he said the credit union industry is attractive professionally, thanks to relatively unencumbered balance sheets and banker backlash, which should combine to allow credit unions to “vastly increase market share.”

Lederman said he'll modify Kinecta's currently lending strategy a bit, keeping some 1st mortgages in house, but putting more up for sale on the secondary market. Kinecta has historically portfolioed first mortgages to the tune of nearly $2.4 billion, out of a total loan portfolio of $3.7 billion, according to its June 2008 5300 report.

“I don't see any limit to growth opportunities by employing a strategy like that,” Lederman said. “I think many credit unions simply have not had the scale to develop a robust secondary market execution. The secondary market is a missing link, because it enables volume origination to be freed from balance sheet constraints.”