The possibility that credit unions might be able to develop other secondary markets for their mortgage loans received a boost Wednesday when Mortgage Liquidity Solutions, a CUSO founded by five large credit unions in 2011, announced it sold a pool of $140 million in mortgage loans from the $1.4 billion Affinity Plus Federal Credit Union in St. Paul, Minn.
Affinity Plus is one of the five founders of the CUSO, along with Bellco CU, Public Services CU, San Antonio CU and Teachers CU.
"We have experienced record growth in our residential mortgage demand from members," said Brian Volkmann, Affinity Plus vice president of lending.
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"We wanted to develop a relationship with a partner that understood our lending philosophy and could provide additional options for the sale of our loans," Volkmann said.
Affinity Plus CEO Kyle Markland agrees. "In the short term, MLS was able to complete our transaction," he said. "But more importantly, they helped provide us with new liquidity options so that we could continue to meet the needs of members. Strategically, we see MLS as an important partner to assist us with the development of alternative outlets for our loans given the uncertainty surrounding the GSEs."
MLS assists credit unions with the sale of loan pools and also provide liquidity via warehouse lines of credit to fund the sale of loans to approved investors.
Amy Sink, CFO of the $2.1 billion TCU in South Bend, Ind., said this type of transaction is exactly what the MLS founders had in mind.
"We believe that by working together through MLS to facilitate this type of transaction, we can build the needed competencies to open new and alternative avenues into markets that will reduce our reliance on correspondents," she said. "This will solidify credit unions' position as a valued lender to members."
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