Tuesday, July 14, 2009

Risky Loans – Part II

My June 26 commentary focused on credit unions making interest only (IO) and payment option (PO) mortgages.

This posting follows up on that earlier posting by looking at the performance of exotic mortgages at these credit unions.

At the end of the first quarter of 2009, $486 million or 6.54 percent of all IO and PO 1st mortgages were 30 days or more past due.

The credit union with the greatest amount of delinquent exotic 1st mortgages was Texans CU in Richardson, TX. Texans had $109.3 million in delinquent IO and PO 1st mortgages, which equaled 92 percent of the credit union’s net worth.

Rounding out the top 5 credit unions with delinquent IO and PO 1st mortgages are: Kinecta (Manhattan Beach, CA) with $69.5 million; North Island Financial (San Diego, CA) with $34.1 million; Wescom Central (Pasadena, CA) with $17.7 million; and Meriwest (San Jose, CA) with $11.5 million.

To view the twenty-five credit unions with the most delinquent IO & PO 1st mortgages, click here.

Additionally, 7 of these 25 credit unions have delinquent non-traditional mortgages greater than 25 percent of their net worth and 4 credit unions exceed 50 percent.

Stay tuned for more analysis of credit union financials.
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