Credit Unions Didn't Do as Well in 2020, Revised Mortgage Numbers Show

The future looks brighter this year for mortgage originations in the latest forecast released Monday by the Mortgage Bankers Association.

However, the past looks a little dimmer for credit unions as the MBA raised its estimate of total originations in 2020, lowering the share for credit unions and showing credit unions’ increase for the year was smaller than other lenders — not larger as it appeared compared with the previous, smaller total.

The MBA forecast dated March 19 showed significant increase in its estimate for refinances in the fourth quarter and forecast for the second quarter. It also showed a big bump for purchases in the second quarter.

The key changes were:

• Refinance originations for the three months ending Dec. 31 were revised upward 17.5% to $851 billion. The revised amount was 123% higher than in 2019’s fourth quarter.
• Refinance originations for the second quarter were revised upward 31.8% to $402 billion. The revised amount was -30.7% lower than a year earlier.
• Purchase originations for 2020’s fourth quarter were revised upward 2.2% to $410 billion. The revised amount was 30.6% higher than a year earlier.
• Purchase originations for the second quarter were revised upward 24.9% to $472 billion. The revised amount was 35.6% higher than a year earlier.

The changes in the first half were enough to increase the originations estimate for the full 12 months of 2021 by 7.6% to $3.18 trillion, an amount that is still 17% lower than 2020.

The changes in the fourth quarter were enough to raise total originations 3.7% to $3.83 trillion for the full year of 2020, an amount 70% higher than 2019.

NCUA data released March 4 showed credit unions originated $291.6 billion in first mortgages in the 12 months ending Dec. 31, up 66% from 2019. That amount gave them a 7.9% share under the MBA’s Feb. 19 forecast, but becomes a 7.6% share under the March 19 forecast.

Likewise, credit unions’ 66% gain in originations last year remains impressive, but is lower than the 70% gain for other lenders in the March 19 forecast. A month ago the MBA showed other lenders with a 64% gain last year.

For the three months ending Dec. 31, the MBA estimated that all lenders originated $1.26 trillion, up 81% from 2019′s fourth quarter. The NCUA showed credit unions originated $80.1 billion in 2020’s fourth quarter, up 36% from 2019′s fourth quarter.

A CU Times analysis showed the strongest gains came in the Midwest, where credit union first mortgage originations grew 52% to an estimated $18.8 billion, weighting for branch distribution. The slowest growth was in the Northeast, where originations grew 26% to $10.8 billion. They grew 33% to $22.2 billion in the South, and 35% to $28.4 billion in the West.