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Many credit unions sell mortgage loans to Government Sponsored Enterprises (GSEs) or other investors to increase capital and balance their portfolio risk. Selling loans provides liquidity, freeing up funds for additional lending so lenders can originate more loans. However, rising interest rates and inflation have curtailed loan applications. The Mortgage Bankers Association forecast that mortgage origination volume will drop about 15% in 2023 compared to the previous year.

Credit union lenders can offset revenue losses by retaining servicing of loans sold on the secondary market. Keeping servicing in-house benefits both credit unions and members by improving the member experience and generating servicing fee and other income.

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