Navy Federal Introduces 100 Percent Mortgage to Make $7bn Origination Goal

The world’s largest credit union said it’s prepared to originate $7bn in mortgage and refinance originations in 2010, and announced it will offer 100% financing to its members for loans up $650,000. Navy Federal Credit Union said it originated more than $6.2bn in mortgages and refinance loans in 2009. The Virginia-based credit union is the world’s largest, both in terms of total assets ($40bn) and membership (3.4m). Navy Federal serves all current and former Department of Defense military and civilian personnel and their families. “Our members’ financial success is our top priority at Navy Federal,” said Cutler Dawson, president and CEO of Navy Federal. “The state of the national economy will continue to have an impact on our shared success.” At the end of Q210, Navy Federal held $13bn in mortgages, $980m in home equity loans, and $151bn in mortgage servicing assets on its books. In its entire loan portfolio — including car loans, credit cards and home loans, as well as business and other lending — Navy Federal had 2.28m total loans valued at $30.7bn. In that pool, 21,426 loans were 2 months or more delinquent, and account for $371.86m of its total loan portfolio — less than one percent of total loan volume and approximately 1.2% of total loan value. The value of year-to-date through Q210 loan charge-offs was $305m. “Navy Federal has contributed to the recovery in 2009 by extending more than $31.4bn in credit, more than any other credit union, and is committed to providing even more credit to members in 2010.” Dawson added. “We continue to see members doing more and more business with us as a result of our great rates, low fees, lifetime servicing of loans and 100% financing available for new mortgage purchases.” The credit union industry, which includes more than 7,700 institutions, has strived to take advantage of recent negative public perception towards banks and tight underwriting standards at mortgage lenders to increase its market share of originations. In Q209, the credit union industry originated 38.8% more mortgages than it did in Q208. In 2009, credit unions originated $95bn in residential mortgages, taking a 4.5% share of the nation’s total mortgage market. Credit union market share of mortgage originations peaked in Q109 at 6.3% of all originations, triple the average seen in previous years. But since then, its declined on a reduction in refinance applications and competitors re-entering the market. The graph below tracks data from credit union consultancy Callahan & Associates and the Mortgage Bankers Association (MBA): Write to Austin Kilgore.