Changes in the way loan officers can be paid has inadvertentlystrengthened credit unions' position as mortgage lenders, accordingto a CU mortgage executive in Colorado.

Writing for the American Credit Union Mortgage Association Web log, LonnieBurkholder noted that new rules designed to protect consumers frombeing steered to higher priced mortgages by loan officers seeking aincrease their own profits has resulted in fees being raised formortgages across the board.

Burkholder is vice president of mortgage lending at the $418million Air Academy FCU inColorado Springs and chairman of the Credit Union Real EstateNetwork in Colorado.

“It appears that the rule has backfired. After a survey by theColorado CUREN members it is evident that lenders have taken thisopportunity to raise their rates and fees to entice top mortgagesales people and increase their income,” Burkholder wrote. “Thesurvey found that mortgage lenders and banks have raised theirrates anywhere from a quarter to a half a percent to retain topsales people and recruit top loan officers from other lenders withthe promise of higher pay.”

Burkholder called this development a “blatant disregard for thespirit...of the new rule” and predicted it would add thousands ofadditional dollars in interest to bank issued mortgages as well aspresenting a further opportunity to CU mortgage issuers.

“As credit unions we know that if we offer fair rates and feesto our members, they will succeed, our loans will be paid back andwe can continue to pay our employees fair wages,” Burkholderwrote.