Yes, to all the above?
✅ Commenter: Anonymous September 20, 2025 at 1:05 PM
"So only ARM mortgages should be offered to SECU members? That is what you are stating?"
No, the concern is over the 30-year fixed rate mortgage [link], which most consumers think is better [link]; and the proposed future selling of our member mortgages into a huge, financially risky, taxpayer-guaranteed support system which failed in 2008 and has been in conservatorship for the last 17 years [link].
In a world where market interest rates can fluctuate widely (post 1980 federal deregulation), no reasonable lender or investor would normally make or purchase many 30-year fixed rate mortgages - a relatively low rate investment - unless Uncle Sam guarantees against losses when "things go bad" - and yes, they eventually will go bad [link].
SECU has been making fixed rate mortgages every year for over 75 years. In fact when deregulation hit in 1980, SECU was almost "loaned out" and had @ 50% of its assets (loans) in 30-year fixed rate mortgages at rates of 7% and 8%.
By 1981 after deregulation hit, SECU was paying 16% on a six-month CD (and some members were complaining that 16% was too low!). Earning 7% to 8% on those 30-year fixed rate mortgages while paying 16% and up on CDs... doesn't take a financial genius to figure out how that will turn out. The Savings and Loan industry (which made most home mortgages at the time) collapsed and disappeared. As a financial institution, you can't pay 16% and earn 8% for long!
✅ So let's look at SECU mortgage lending over the last few years:
Dec. 2022 New fixed >15yrs $2.25 billion
New fixed <15yrs $300 million
✔ ARMs $4.2 billion Total mortgages: $22.2B
Dec. 2023 New fixed >15yrs $560 million
New fixed <15yrs $195 million
✔ ARMs $3 billion Total mortgages: $24.3B
Dec. 2024 New fixed >15yrs $875 million
New fixed <15yrs $225 million
✔ ARMs $2.2 billion Total mortgages: $25.3B
June. 2025 New fixed >15yrs $373 million
New fixed <15yrs $129 million
✔ ARMs $1.6 billion Total mortgages: $$26. B*
* At June, 2025, SECU held 37,000 member fixed rate, >15 years mortgages totaling $7 billion, 25,000 fixed rate, <15 years mortgages totaling $2 billion, and 107,000 member ARMs totaling $17 billion
✅ If ARMs are so bad for SECU members, then why does the ELT and SECU Board keep "sticking it to the membership"?
😎 Must be that some of those Luddite, "new/new" commenters [link] are continuing to fumble around with their 1930/2008 ideology - it's been a costly misadventure for the SECU membership.
So i you think that “most consumers” think fixed rate loans are better. And you clearly think ARM’s are better.
ReplyDelete3:35pm That's right in most cases an ARM is better for the SECU member if made and priced appropriately.
ReplyDeleteEven when an ARM is not optimally priced to the borrowers' advantage it usually is still the best deal.
Looks like SECU members have chosen the ARM by substantial margins in 2022, 2023, 2024, and so far in 2025! About 2/3rds of SECU members chose the ARM
Are they wrong? Did SECU LA folks advise members to make a mistake? How did this happen?
So I guess SECU members are smarter and more savvy than most of the members of the nation’s credit unions, and for that matter most every American that has a fixed rate mortgage.
DeleteOne of the many things you fundamentally don’t get is the ARM’s arent a better product because secu members select them more often than than a fixed loan. That sound make my first statement true and while you might believe that, no rational person would.
Our members have been effectively steered into ARM’s over tome based on how they are priced and underwritten relative to fixed loans. Example - can’t get a 30 year fixed 100% ltv, but you can with an ARM. We basically adversely select ourselves by creating creating interest rate risk and collateral risk for members - that’s before we talk about liberal ATR, fico, and Dti requirements.
What could go wrong? Wait, I know, billions in DQ and the worst performing mortgage book in the industry. But you keep on justifying and rationalizing it…. You gonna open up your farm to some members , a coupla thousand of them are gonna need a place to stay because of the model you ran and are advocating.
4:05pm Think the takeaway for most folks is you have poor underwriting practices. The members didn't trick you into making the loan!
DeleteRegardless of any excuses you try and put forward ... you approved the loan.
The soaring losses and weak collections are not the members fault... own the problem, you made the loan.
You’re the only one stuck in the past with your old business model - yet another thing that you think is so wise, yet you can’t point to a single lender that copies it.
ReplyDelete3:52pm Hate to keep pointing this out, but the only creative lending leadership coming from "new/new" now for almost three years is "nobody else is doing it", aka "it's industry standard" .
DeleteTrying to recreate 1930's lending standards doesn't seem to be a step forward... nor in the right direction (2008!)
But each to they're own. Do have an NC club in which you might be interested given your fixation on the past and all things "industry standard" as the best guide in life.
They meet on December 16th each year down at Kitty Hawk... sure you would feel right at home and well-grounded in your opinions.
https://www.ncpedia.org/man-will-never-fly-memorial-society
So I guess SECU members are smarter and more savvy than most of the members of the nation’s credit unions?
ReplyDelete4:14pm Well yes, I actually do; when they receive sound, accurate - "Send Us Your Momma" - advise from their credit union! You don't?
ReplyDelete