For the first time ever, credit unions have originated more than 8% of U.S. mortgages originated in any given three month period, according to an analyst with Callahan and Associates.

The previous record had been just over 5%.

Lydia Cole, director of industry analysis for the firm, said that credit unions hit this high point during the first quarter of this year to credit union mortgage executives attending a  mortgage lending regional workshop in Orlando, Fla., on May 11. The workshop was sponsored by the American Credit Union Mortgage Association.

The research firm reported that credit unions originated $26 billion in first-mortgage loans, which include both purchase money loans and refinancings.

In email correspondence after the event, Cole noted that the accomplishment meant that, “In the first three months of 2012 credit unions originated over $26 billion in first mortgages, which ranks the industry as the third largest mortgage lender in the country, behind Wells Fargo and Chase.” 

She reported that first-mortgage originations had risen 46.6% above the level in the first quarter of 2011, though she also noted that the trend has been in place across housing finance. Banks and other housing finance companies are also seeing increased originations, she observed, and while a significant number of housing finance firms and financial institutions have pulled back from the mortgage market, the impact of those pull backs on credit unions have been hard to measure. It's been easier to assess the impact on the pull backs on single big players. “Wells Fargo’s ascension to the No. 1 spot is broadly attributed to the pull backs from Bank of America and Citi,” she wrote.

ACUMA president Robert Dorsa attributed the accomplishment to what he called very hard work on the part of credit unions that have committed to make mortgage loans. “We haven't seen a big jump in the numbers of credit unions that are offering mortgages,” he said, “so the increase is coming from credit unions that are doing everything they can with what they have got.”

He also said that the association had anecdotal accounts of credit unions that had put additional marketing and outreach programs into place, such as working with local Realtors. But those efforts were hard to track in the data. He also acknowledged that the number of other mortgage lenders that had closed up shop since the housing bust had also likely had an impact on the numbers.

Cole accorded credit more broadly, pointing out several ways that changes in the broader CU housing finance industry had helped bring about the success.

She pointed out that CU Realty has been working consistently for some time to help CUs to build connections and real estate professionals and generate volume.

“Prime Alliance has helped many credit unions improve internal processes and make it easier for a member to apply for a loan,” she added. “There are CUSOs that extend broader services to help smaller credit unions make mortgage loans. myCUmortgage, a CUSO of Wright-Patt Credit Union, is one example. They are helping 142 credit unions grant mortgages and are on pace for granting $1.25 billion in mortgage loans this year. Outside of process and funding, there are organizations helping credit unions be better lenders and focus on future strategy. The ACUMA workshop I was at last week is one example.”

She also expressed confidence that this represents more than just a one-time accomplishment but cautioned that credit unions will, one day, need to move past refinancing mortgages and originate more purchase money loans.

“A lot of the volume generated over the last year is refinances,” she wrote. “Once interest rates rise, refinances will subside and credit unions will need to focus on the purchase money loans. Utilizing the industry resources mentioned above can help prepare credit unions for that activity and building a sustainable mortgage lending business. We will likely never return to 2% market share.”