| Title: | DCU |
| Notice: | 1996 BoD Election results in 1004 |
| Moderator: | CPEEDY::BRADLEY |
| Created: | Sat Feb 07 1987 |
| Last Modified: | Fri Jun 06 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1041 |
| Total number of notes: | 18759 |
Re : Note 462.7 BOD Candidates and Disclosures MRKTNG::LUCIANO
I thought the following comment was interesting....
>In case anyone's interested....I had a home loan from DCU....but it was
>sold to another institution.
I assume you are still paying on the loan, just not to DCU anymore.
We just finished up an appraisal (New Mexico) and will close on our
refinance Monday with our new credit union. (We bailed out of DCU
except for $5 last September...and yes, I voted...for Phil G.)
The credit union is carrying the paper on our loan and is not reselling
it on the secondary market.
What decision process is involved in a credit union holding on to
mortgages or selling them on the secondary market? Besides the lower
rate we are getting on this loan, the fact that it won't be moving is
also attractive (our original loan has done this 3 times in 3 years!)
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 550.1 | Re .0 | STAR::PARKE | True Engineers Combat Obfuscation | Wed May 06 1992 16:40 | 20 |
Short term profit. If the CU loans out $100,000 and then gets it back a little at a time, it takes a while (at, say, 7%) to really Profit on the $100,000. If the CU does the leg work, and loans out $100,000 (qualifying, credit check, etc) and the sells the loan for $110,000 the SHORT TERM profit is good, and the $100,000 is immediately available for loaning again. (It used to be called a shell game }8-)} ). Chuck, in his Meat the Prez (he got chewed out a lot) said that they might SELL the loan, but continue to SERVICE (take the payments, etc) it themselves. That way they get their gravy ($100,000 back +), and continuous income for their servicing the loan also. Disclaimer: I made the figures up I may also be talkig throught my hat | |||||
| 550.2 | need to sell some loans | SLOAN::HOM | Wed May 06 1992 16:59 | 12 | |
In order to avoid interest rate risk, the DCU needs to sell some of the loans. Consider what would happen if the DCU didn't sell the loans and interest rates shoots up to 15%. The DCU would be lending money at 8% and paying interest on deposits at 15%. This was the exact scenario that banks were faced with in the early 80's. On the otherhand, there's no reason why the DCU can't sell the loan but continue to be the servicing agent. Gim | |||||
| 550.3 | does DCU service what it sells? | LGP30::FLEISCHER | without vision the people perish (381-0899 ZKO3-2/T63) | Fri Aug 28 1992 18:03 | 14 |
re Note 550.2 by SLOAN::HOM:
> On the otherhand, there's no reason why the DCU can't sell the
> loan but continue to be the servicing agent.
So, does the DCU continue to service the loans it sells or
not?
I like the convenience of being able to make my payments at a
local office (or even by telephone!) without having to take
into account unpredictable transit times (as with the U.S.
Mail).
Bob
| |||||
| 550.4 | PATE::MACNEAL | ruck `n' roll | Fri Aug 28 1992 18:10 | 7 | |
� -< does DCU service what it sells? >-
I took out a first mortgage with DCU about a year ago. It was
immediately sold to Shawmut Mortgage Co. Shawmut provides the service.
Transit time via mail isn't bad as the address for payments is in the
same city I live in (I suppose I could even make payments in person if
so desired). They also have an automatic payment option.
| |||||