The $1.4 billion Baxter Credit Union has joined the other 60 CUs that service more than $1 billion in mortgage loans, even though it has only been in the mortgage business for eight years.
"Mortgage lending is paramount to BCU, and our vision of becoming the primary financial institution for our members," said Mike Valentine, CEO of the Vernon Hill, Ill., credit union. "As a cooperative, this success proves that our members place their trust in us, as we do them, and we look forward to meeting their needs for many years to come."
The number refers to loans the credit union originated and kept on its own books and those the credit union originated and sold to Fannie Mae and Freddie Mac.
"We are a little bit unusual in that so much of our loan business goes to the secondary market," explained Robert McKay, chief operating officer for Baxter. McKay explained that the low-rate mortgage environment has led the credit union to sell many more of the loans it originates, while retaining the servicing. But he also explained that the credit union was better able to carry the burden of servicing than many mortgage accounts by outsourcing the most routine parts of the process.
"Over the years our mortgage lending strategy has evolved. Beginning as a mostly outsourced referral program, we gradually began to add portfolio capabilities and eventually developed a full mortgage banking platform," according to Herb Behrens, vice president mortgage lending. "Our expectations are that our mortgage servicing portfolio will eventually surpass the asset size of the credit union, assuming a strong secondary market remains in place."
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