As part of the effort to revamp and improve the mortgage program, Callis said NIH had been tightening up its underwriting and focusing on improving the underwriting and creating what NIH hoped would be super-performing mortgages. Not only would such mortgage loans not carry costs of delinquency, they would also be well-positioned for the private investors that Callis is convinced will return once the future course of Fannie Mae and Freddie Mac have been determined.

Callis said NIH had not planned on turning to CUSOs as a potential source of secondary market investors, but said that she was open to the idea. Recently, one newly formed mortgage CUSO, Mortgage Liquidity Solutions, had sold $114 million in credit union-issued mortgage loans to other CUs.

Callis said NIH was still selling mortgage loans to Freddie Mac and Fannie Mae but only the 30-year, fixed-rate ones that the credit union still offered. Where NIH was having more success, she explained, was with mortgages with shorter terms that she said had become very popular with baby boomers contemplating retirement in a few years.

"These are people who are looking ahead and realizing they want to retire soon and saying, 'Man, I need to pay down this mortgage,'" Callis said. "A 15-year fixed-rate product lets them do that," she added.

This sort of mortgage offering fits into what may be a trend in housing finance: consumers seeking to take advantage of very low mortgage interest rates to either pay off houses more quickly or at least dig more deeply into their mortgage principal.

QuickenLoans, a nationwide mortgage leader, has been taking advantage of this trend with its "Yourgage" loan, a mortgage loan that allows the consumer to pick the loan's term, anything from 8 to 30 years. These are attractive to baby boomers looking to retire, but also with younger consumers who want to take advantage of lower interest rates to pay off their homes more quickly and have access to the unencumbered asset as a source of wealth and future capital.

"I think there may be an issue with credit unions refinancing loans at a lower interest rate for a shorter term," said Bob Dorsa, president of the American Credit Union Mortgage Association, a leader industry trade group. "But there is no doubt that they can be a tool to help attract younger members as well as help out the baby boomers," he said, adding that his son, in his mid-thirties, had recently refinanced a 30-year note into a 15-year note. "With the lower interest rates, he can afford the payments and can't see why he shouldn't get the benefits of the asset more quickly."

Dorsa said he had also met credit union CEOs who reported having members ask them if their credit union offered similar loans after they saw a commercial for the Yourgage product.

Callis said NIHFCU tended to see its current mortgage portfolio as a largely different product than the portfolio that had been established during the housing finance boom. She described that one as the legacy portfolio and said that the CU had some REO from it, but  the new portfolio had much tighter underwriting.

One thing that had helped that effort was the adoption of technological packages for both servicing and loan origination that Callis said were the industry standard across the housing finance industry. Using products like these, she explained, had allowed the credit union to be more efficient as it moved to tighter underwriting and more streamlined loan servicing.

Editor's Note: Senior Staff Reporter David Morrison is a member of NIHFCU but does not have a mortgage loan with the credit union.