MADISON, Wis. (10/1/09)--Credit unions are playing an increasing role in the lending arena--particularly mortgage lending. As qualification standards tighten and private mortgage insurance (PMI) becomes harder to obtain, lenders are turning to Federal Housing Administration (FHA) programs to meet demand, explained Linda Clampitt, senior vice president of CU Members Mortgage. Clampitt added that CU Members Mortgage processed 111 FHA loans ($15.6 million) in 2007. However, that number jumped to 851 loans ($129 million) in 2008, and 1,341 loans ($198.5 million) to date in 2009. “FHA loans offer a valuable option for originators because it is one of the most flexible mortgage products available during these difficult economic times,” Clampitt said. “We’ve added 142 credit unions this fiscal year to our list of FHA sponsored agents, and seven additional credit unions are in process right now--that’s more than double what we had last year. “FHA programs offer low down-payment options for the credit qualified at reasonable costs,” she added. “And because an FHA loan insures the lender against loss, this type of loan typically has an interest rate that is among the best in the market.” In previous years, there were so many conventional products available that many credit unions did not work FHA programs extensively, Clampitt said. Also, until last year, credit unions saw success by offering other loan options. But the sweeping changes in the mortgage industry have changed the lending environment completely. The challenge now facing many credit unions is having a strong compliance department to help navigate regulatory changes accurately and having the technology to respond to demand and the expense to manage both, Clampitt said. Credit unions originated 38.8% more first-lien mortgages in second quarter of 2009 compared to the same time in 2008, according to Callahan & Associates’ First Look Program market research. Credit unions surveyed reported originating a combined $30.7 billion in mortgages during the quarter, up 16.1% from the first quarter of 2009. Growth in credit union lending comes at a time when credit availability for consumers remains a key issue. Consumers are looking for help and value, and they are finding both at credit unions nationwide, the company said.