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Credit Union Trade Groups Endorse Mortgage Plan That Harper Called 'Half-Baked'

The Notice of Proposed Rulemaking allows federal credit unions to purchase mortgage servicing rights under some conditions.

financial regulations Image: Shutterstock.

Credit union trade groups, including state leagues, said the NCUA should allow federal credit unions to purchase mortgage servicing rights from other federally-insured credit unions — a plan that NCUA Chairman Todd Harper said was “half-baked.”

“Some credit unions have historically recognized mortgage-backed loans maintain a very low level of default, which make them highly favorable investment options,” Patrick Conway, president of the CrossState Credit Union Association, told the agency. “MSRs can potentially provide an ongoing stream of income to a credit union’s bottom line, given that the credit union understands and prepares for potential risks involved.”

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David Baumann

 

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