"We've built a great mortgage team here at Charter Oak," said Charter Oak CEO Brian Orenstein. "The momentum from last year's success carried over into 2011. We want to be known as the place to get your mortgage. And we are getting there. I am very proud of our staff and so thankful to our loyal membership."

The CU attributed its success in part to a large range of mortgage options and announced it would start making loans backed by Federal Housing Administration insurance on Feb. 1. These FHA-backed loans allow smaller down payments and more flexibility.

But John Dolan, chief lending officer at Charter Oak, gave more credit to ways the credit union had begun to shift its mortgage lending, attributing it to a shift in attitude toward mortgage lending on the part of the CEO and other leaders.

In particular, the credit union began offering what it called its accelerator mortgage, an 8- or 12-year mortgage loan that allows holders to pay off their mortgage notes more quickly in 2010. These, along with a 30-year cost saver mortgage, are refinance loans that largely eliminate closing costs, flood certification fees, document preparation fees, credit reporting fees, recording fees and title insurance fees, wrapping all of these into a $400 origination fee.

Dolan said the CU limits the loans to no more than $250,000 and set a loan to value or ratio of no more than 80% for the product. Loans of more than $250,000, Dolan said, require a more thorough appraisal and thus cost more than the $400.

The target market for these loans are baby boomer members who want to pay off their current mortgages as soon as possible to prepare for retirement. According to the CU's website, Charter Oak offers the accelerator loans at an annual percentage rate of just over 3%, and Dolan said the CU was surprised at how many people found the loans appealing even in a sagging economy.

"We have definitely seen an economic downturn in eastern Connecticut," Dolan remarked, "but as bad as it has been, it clearly was not so bad that it prevented some people from taking the steps they needed to take to prepare for retirement," he said.

One additional sign of the loan program's impact has been the number of new members it has brought Charter Oak, Dolan said.

The loans are necessarily super-performing loans and, by definition, non-conforming to secondary market standards, which means the CU carries them on its own books where, Dolan said, the CU expects a majority of them to stay for the balance of the terms.

"Frankly, we only started offering the accelerator loans in 2010 so we aren't really sure whether we will see them refinance or not since it's too early," Dolan said, "but don't expect most will."

By contrast, many 30-year mortgages refinance between five and seven years. Dolan said the CU sells the 30-year loans it originates, but keeps the servicing to be able to better protect the member relationship.

Dolan also explained that the popularity of the accelerator loans means that refinances dominated the credit union's loan program, a situation that Dolan and other Charter Oak leaders knew would not be sustainable.

"We could see that we were making fewer of the accelerator loans in 2011 than in 2010, because the mortgage market had fallen overall but also because more competitors began offering similar loans," Dolan said. "But in order to have a really sustainable mortgage program, we needed to offer more purchase money loans."