Federal Reserve Graph of 10-Year Treasury Note
...which is generally used as a base to set home mortgage rates.
😎 Anonymous September 19, 2025 at 9:13 PM "SECU employees do a great job at educating members about how an ARM is very often the better option. What would your argument be against offering a 30 year fixed if the member is educated on an ARM and still wants the 30 fixed?
First, I agree that SECU branch employees have done a remarkable job in explaining the benefits (many still have doubts!) of an ARM to a very, very skeptical membership. The 30-year fixed rate is the "industry standard"after all; and, those with vested interests in keeping it that way, emphasize the rising rate risk with some not so subtle boogeyman tactics.
Why? Because there is lots of money at stake (surprise, greed is involved!). Remember a 30-year fixed rate mortgage is a financial "heads I win, tails you lose" proposition for mortgage brokers, who now originate the vast majority of U.S. home mortgages.
✅ Here's the key for your consideration: A mortgage broker makes the loan, but doesn't "fund it". What do you mean "doesn't fund it"? Well, when we borrower to buy a home, "somebody" has to provide the money for the loan, right? (Most of us don't think about that side of the transaction!)
With brokers the investors are most often those GSEs (taxpayer guaranteed enterprises), currently under conservatorship by the Feds. The broker just wants to make the loan and isn't going to argue with you about which loan is best. A 30-year fixed rate is what you want, fix rate is what you get! The broker doesn't care because "somebody else" (the GSEs) is funding the loan; the broker isn't "on the hook".
😎 Lets take a look at the classic problem with an "SECU funded" 30-year fixed rate mortgage. See that low point in rates around 2021/2022, which was the result of the pandemic? Rates hit an all-time rock bottom.
Who "funds" our loans at the Credit Union? In 2021 and 2022 SECU made over $6 billion in 30-year fixed rate mortgages at around 3.25% and "funded" those loans with other SECU members' hard earned savings dollars!
Over the last 3 years, SECU has only been able to keep member deposits by paying 4% to 5% rates on CDs (the rest of member deposits earn substantially less!). Over the last 3 years, total SECU member CDs have grown from $4 billion to $15 billion - from less than 10% to @30% of total member deposits.
😎 SECU earns 3.25% for the next 30 years and pays members 4%/5%? Really? That's fantastic!
Why do you think brokers or mortgage officers are more interested in fixed loans over arm loans? They get paid the to originate them…
ReplyDeleteAre you saying members shouldn’t benefit from doing business with SECU, or that some members used basic finance to benefit more than others?
ReplyDelete3:23.. yes, that’s what he is saying. So e wise members who chose fixed rate on record low rates benefitted from the cu, which I thought was the point
DeleteWho takes the risk? Thought I kinda covered but the credit union does. Should be implicit what that means, but all member owners bear the interest rate risk of any fixed rate loans held on the balance sheet
Delete7:51, you must be dense. The 5/5 ARM also has interest rate risk. I guess we should move towards daily interest rate movements on mortgages to appease the 5% of members who don’t like fixed rate mortgages.
Delete8:35am Aren't you missing the fact that two-thirds of members have chosen the ARM over the "new/new" years? 66% is a good bit higher than the 5% you mention.
DeleteHere check out the facts:
https://www.secujustasking.com/2025/09/secu-should-only-make-adjustable-rate.html
I didn’t give SECU permission to use my dollars to fund these loans. This doesn’t seem right and should be investigated—how can we opt out?
ReplyDeleteGood one - satire, right? you didn’t give us, nor do we need, your permission to do anything with your dollars.
DeleteIf I worked in Mortgage Lending , I would be leaving so fast. Work for a mortgage broker, now your required to do the same work and make up to 4 times the money. These idiots don’t even think about retaining talented employees. They simply don’t care while they collect fat paychecks at the executive level. A bunch of yes man collecting a paycheck. No leadership just cowards
ReplyDeleteRequired to do the sane work? Like what, collect enough information to make a good loan, and to actually comply with regulations and stuff like that?
DeleteWe’re onto pilot paying incentives in investments and mortgage to get caught up with how things are done in the industry. Need to attract and retain people and incentbtge right behavior - especially selling the right products to members.
DeleteMLOs in my district are dropping like flies
Delete@3:30 SECU is piloting this?
DeleteSo we only fund mortgages with cd’s? Did you not just post the other the average of other deposit rates was 1.30%?
ReplyDeleteHerein lies the problem. SECU can not sustainably keep 30 fixed rates on the books and it not negatively affect deposit rates. Hence the need to sell to the GSEs
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ReplyDeleteYou make the argument that even though the industry offers it, SECU should not offer a 30 year fixed rate because it is bad for consumers. How can you argue that SECU should offer a SALO at a high interest rate? Historically you said it was a better option for consumers than pay day loans (it is!) but the interest rate is still far higher than members should pay.
7:43am Think you miss the point. Trying to explain that an appropriately priced and underwritten SECU ARM is most often a much better deal for member borrowers.
DeleteRealize that most folks won't agree with that unless it is explained accurately. SECU branch staff have done a great job with that difficult explanation task over the years.
Hard to change embedded economic interests, especially if those interests would evaporate without a costly (2008!) federal government political guarantee.
So you think the members that selected ARM when fixed rates were at record lows, and now they can’t afford to make payments were well informed and educated by secu?
DeleteAgree with all your points. That’s the challenge - how do we change embedded economic interests? The 30 year fixed should not hold the place it does in the US economy but how do we change that since it is the minority view?
Delete10:18am You still duck an squirm when faced with accountability... why did you make bad loans? The member didn't approve the loan - you did!
ReplyDeleteIf you know ARMs are bad, why do you keep making them? Another $16 billion in the first half of 2025.
... sounds almost criminal to be approving bad loans. Guilty?
@10:18 is describing an ARM with no limits on interest rate adjustments. The adjustment limitations make the SECU ARM a safe option for most members.
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