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NAFCU's latest Economic & CU Monitor report on housing, sent to members yesterday, notes that credit unions remain involved in the secondary market, with nearly 60 percent of respondents selling mortgage loans to Fannie Mae, Freddie Mac or both.

Specifically, about 35 percent of respondents sell mortgage loans to Fannie Mae and nearly 12 percent sell mortgages to Freddie Mac. Roughly 12 percent of respondents to NAFCU's survey sell to both, demonstrating that the government-sponsored enterprises (GSEs) continue to serve as valuable partners in credit unions' efforts to serve their members' needs. Respondents sold, on average, 37.1 percent of their mortgage loans to the GSEs in 2017.

Other than the GSEs, 39 percent of survey respondents use the Federal Home Loan Banks (FHLBs); 11 percent, respectively, use CUSOs or mortgage wholesalers; and nearly 6 percent, respectively, use Ginnie Mae or private placement to offload mortgage loans from their balance sheets.

Fannie Mae and Freddie Mac have been under government conservatorship for the last 10 years. As Congress opens new discussions on housing finance reform, credit unions remain opposed to a move toward full market privatization, with 73.3 percent of respondents against the elimination of the GSEs and a government guarantee. Only 20 percent of respondents would support proposals to eliminate the GSEs, even with a government guarantee.

Alternatively, the vast majority of respondents (71.4 percent) supported keeping the GSEs or something similar with an explicit government guarantee. NAFCU is working to ensure that any housing finance reform measures that are adopted preserve a government guarantee, unfettered access to the secondary market, and fair pricing based on loan quality and not volume for the credit union industry.

Also included in the Economic & CU Monitor are the results from the February Credit Union Sentiment Index (CUSI), an index based on NAFCU member responses to eight questions on growth and earnings outlook, lending conditions and regulatory burden.

The CUSI improved in this month's report – reaching its highest point on record – primarily driven by respondents' outlook on growth and regulation. The lending component also grew slightly during the month. The earnings component was the only element of the CUSI to decline in February, with a larger share of respondents having a negative outlook on earnings.

NAFCU members are encouraged to participate in the association's surveys. Next month's Monitor will focus on financial literacy and community outreach. Credit unions can fill out the survey online; responses are due by March 7.