MPF Xtra & MPF Traditional: A Member Success Story

posted on Thursday, November 12, 2020 in Mortgage Partnership Finance

Oregon Community Credit Union (OCCU) was originally founded in 1956 in Eugene, OR. Today, OCCU manages more than $2 billion in assets while serving the financial needs of more than 180,000 members. In 1995, in an effort to meet the increasing demand for their services, OCCU became a member of the Federal Home Loan Bank giving them access to a new source of liquidity.

Twenty years later, in 2015, OCCU found itself brokering out more than 50% of their mortgage production to third-party lenders on a servicing released basis. This did not align with OCCU’s growth, member experience or profitability objectives. That summer, OCCU engaged in our Mortgage Partnership Finance® (MPF) program giving them the ability to sell mortgage loans to FHLB Des Moines instead of having to broker them out. Since then their usage of the program has evolved, including how they balance their usage of our MPF Traditional and MPF Xtra® products.

Russ Bernardo, Chief Lending Officer, has been with OCCU since 2018 and has overseen the accelerated growth of their mortgage business. By fully utilizing the MPF Program, the mortgage team at OCCU has been able to better manage their interest rate risk, liquidity, and loan-to-share risks and targets. A large part of this success has been their balanced use of our MPF Traditional and MPF Xtra product. When asked how they utilize the products, Russ replied:

  • MPF Traditional – “We are utilizing the MPF Traditional product for our highly qualified member loans with limited to no Loan Level Pricing Adjustments (LLPAs) as well as using Traditional for targeted ‘mini-bulk’ sales when the balance sheet calls for it.”
  • MPF Xtra – “Understanding these loans are Fannie/Freddie delegated has allowed us to streamline our underwriting operations to confirm that the loans conform to Automated Underwriting System (AUS) requirements, and save more underwriter time on harder-to-place loans that we select for the Credit Union’s internal portfolio.”

By implementing a strategy of selling individual loans as they close through MPF Xtra and doing post-funding mini bulk commitments through MPF Traditional, OCCU has been able to react quickly to the needs of their balance sheet and income statement. Over the last 18 months OCCU has been able to exceed their net income targets while keeping the servicing “in house” for their members. This has allowed Russ and his team at OCCU to better serve their members while continually meeting their objectives for growth, member experience and profitability.

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  1. Mortgage
  2. MPF