According to the 2,974-member credit union's most recent financial performance reports, the top safety and soundness issue was loan quality. As of March 31, the community-chartered credit union reported 10.59% delinquent loans and 6.17% charge offs.

Net worth plummeted from 8.12% as of March 31, 2012 to -0.27% as of Dec. 31. The credit union sold investments during the first quarter to raise net worth back to 4.27% as of March 31.

PEF's real estate loan portfolio has shrunk from nearly $10 million during the first quarter 2012 to $7.7 million one year later.

MyCUmortgage, a leading housing finance CUSO and a subsidiary of the 248,000- member, $2.6 billion Wright-Patt Credit Union in Dayton, Ohio, recognized PEF in 2010 for having increased its housing finance loan origination 183% from 2009 to 2010, according to the CUSO.

The CUSO did not explain its relationship with PEF or which CUSO services PEF used when it recognized the organization, but PEF CEO Russ Fisher recounted how the credit union worked hard to cut its mortgage interest rates as much as possible and then saw the impact reflected in improved housing finance numbers.

“Soon, we had people coming in saying that their neighbors or their friends or their coworkers had gotten a great mortgage deal from us and asking if we can give them one, too,” Fisher told Credit Union Times for a November 2010 story. That's what largely fueled our growth.”

Fisher indicated that his only regret was that the credit union had not started earlier. “For a time after we switched to a community charter, we were still the best-kept secret in our community of eastern Cuyahoga County,” Fisher said. “We expect that to keep on changing,” he added at the time.

But Tim Mislansky, chief lending officer at Wright-Patt Credit Union, challenged the idea that housing finance led to the credit union's demise. ”I can't say what the problem was between this credit union and NCUA, that's something between this credit union and the agency. But I can look at the Call Reports and can see that mortgage loans were not the source of the problem.”

Mislansky pointed out that according to the December 2012 call report, PEF had no delinuent mortgage loans during 2012 and didn't charge off any mortgage loans that year, even though the CU did charge off $1.6 million in loan losses, $1.37 million of which came in the category All Other Loans.

Mislansky said that PEF had a relationship with myCUmortgage since 2008 and that it still had one at the time of the liquidation. He reported that the CUSO provided a number of different services, including underwriting housnig finance loans, but added that the credit union always had the final say on whether they wanted to fund, keep or sell a qualified or unqualified mortgage loan.

According to the credit union's website, PEF FCU was chartered in 1957 and originally served the employees of Picker X-Ray Corp. It converted to a community charter in 2006.