Origination News Feature Story

Co-op Loans 'Chug Along'

By Bonnie Sinnock

NEW YORK-The corporate parent of the National Consumer Cooperative Bank continues to source more than half of its loans from brokers and at press time last month had a relatively healthy origination volume forecast for the rest of this year despite market challenges.

"We're chugging along," says Andrew Hood, the New York-based vice president of strategic marketing for the savings bank operations of Washington-based NCB.

Mr. Hood told this publication mortgage brokers still produce about 53% to 54% of NCB's loan volume while the remainder of its production is retail originated. "The numbers are great on both sides," he says.

Rates have not been quite so low since the latter half of the second quarter, which has slowed volumes for some, but as Mr. Hood notes, "rates have not been bad" and NCB's pipeline at the time of this writing last month still looked strong.

NCB has a history of fairly conservative underwriting, generally sells to Fannie Mae, retains servicing and is "not doing a lot of portfolio lending right now" as it, like many, has had to tighten guidelines, he says.

But it still may have more resources and flexibility than some of its peers, Mr. Hood says. When asked about whether the possibility of economic stress on co-op financials could adversely affect originations, he noted that in the past NCB has been able to compensate for circumstances where this led to borrower profiles outside Fannie's guidelines by making portfolio loans. While it makes few portfolio loans today, it does make some, he said.

In addition, NCB has been making and has seen some increased interest in co-op combination loans, which allow qualifying borrowers to buy the unit next door, Mr. Hood said.

Regions where there are a fair number of co-operatives and co-ops loans include New York, parts of Northern and Southern California, Chicago, Seattle and Washington.