Credit Union Mortgage Purchase Programs
for State Chartered Credit Unions in Massachusetts
MSIC Partners (Partners) has developed a loan purchase program for Massachusetts state-chartered credit unions to purchase high-quality closed whole loans from non-credit unions (i.e. banks) “in” or “outside” your field of membership.
Partners has relationships with several New England banks that want to sell newly closed, high-quality first mortgages to credit unions in Massachusetts. (All loans are underwritten to secondary market requirements.)
How it works?
In a 2019 legal opinion, the Massachusetts Division of Banks (DOB) stated its position that Massachusetts state-chartered credit unions are permitted to buy for investment whole residential mortgage loans originated by banks to borrowers who may or may not be eligible for membership in the credit union, provided they meet the following 3 criteria:
#1
Credit Union has a comprehensive written policy governing such activities.
#2
Credit union has received the NCUA approval*
#3
The loan is secured by collateral anywhere in the United States.
*NCUA approval required under the NCUA’s regulations, 12 C.F.R. § 741.8(a)
Why is this important?
Your credit union may want to increase earnings by adding high credit-quality first line mortgage loans.
Your credit union may not be able to originate enough quality first mortgages.
Your credit union diversifies their risk outside of their current geographic region.
Your credit union may want to put more Adjustable Rate Mortgages (ARM’s) in their portfolio.
MSIC Partners Role:
Partners will help your credit union meet the above criteria and then connect your credit union with the appropriate bank(s).
Partners has a written policy template, created by Partners’ outside counsel, that we can share with your credit union to use in meeting criteria # 1.
Partners has the necessary documentation for your credit union to seek NCUA approval as required in criteria # 2.
Partners has the ability to perform a pre-purchase underwriting review to make sure the loans meet the agreed upon acceptable standards before you purchase the loan.