Credit union sales of first mortgages, which have contributed to record earnings this year, diminished in the second quarter.
In the three months ending June 30, credit unions originated $81.1 billion in first mortgages and sold $28.5 billion of them.
Originations have still been rising but at a slower clip. However, sales were down 15% from a year ago and down 4.9% from the first quarter.
Credit unions braked on the percentage of loans sold. They sold 35% in the second quarter, down 40% in the first quarter to 42% in the second quarter of 2020.
A CU Times analysis of NCUA data showed that credit unions with first-mortgage sales have higher gross income and higher ROAs.
Part of that was a function of size: Big credit unions offer mortgages and many small credit unions don’t.
But it was also a reflection of the income contribution of mortgage sales to income.
The 1,159 credit unions that sold mortgages in the first half accounted for three-quarters of the movement’s assets and generated 23% of their gross income from the NCUA’s “Other Operating Income” category, where credit unions are supposed to report gains from loan sales.
That compared with 16.3% of gross income from Other Operating Income among the 3,977 credit unions that did not sell mortgages, most of which also did not offer mortgages.
The loan-selling credit unions sold $58.5 billion of first mortgages and $10.5 billion of participations and full sales of non-real estate loans in the first half.
Of the 3,036 credit unions that originated first mortgages in the first six months of 2021, only 1,047 sold any amount of them.
The smallest mortgage seller was Galaxy Federal Credit Union of Franklin, Pa. ($59.1 million in assets, 4,773 members). It sold $44,800 in the first half, compared with $1.3 million in originations. It sold no first mortgages last year.
The 10 largest sellers of mortgages included some that are among the Top 10 by assets, while others are aggressive, non-portfolio lenders.
For example, the Top 10 for first mortgage sales included GreenState Credit Union of North Liberty, Iowa ($7.7 billion in assets, 303,025 members), which ranked 30th by assets but 8th by its sales of $953 million in first mortgages.
Its sales exceeded originations. GreenState originated $676.4 million in first mortgages in the first half, up 55.4% from the first half of 2020.
GreenState on Monday reported that its first half originations included $50 million in home loans to Black members, up 67% from a year earlier.
The amount also put the credit union on track to meet its goal announced in January of making $500 million in mortgage loans to minorities over the next decade to help close Iowa’s racial homeownership gap.
“We are proud to report our initial results are incredibly promising, and we are just getting started,” President/CEO Jeff Disterhoft said.