Evolution of Mortgage Market Through the Years

Explore the timeline of the mortgage market evolution from the early 1900s to the creation of Fannie Mae, Freddie Mac, and the CDCU Mortgage Center. Learn about key milestones such as the introduction of 30-year fixed-rate loans, secondary market development, and specialized loan programs. Discover how regulations, economic shifts, and innovative solutions have shaped the mortgage industry into what it is today.

• Mortgage Market Evolution
• Fannie Mae
• Freddie Mac
• CDCU Mortgage Center
• Loan Programs

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1. BUILDING A MORTGAGE POWERHOUSE The CDCU Mortgage Center, LLC

2. Mortgage Market - The Early Years Early 1900 s Building and Loans Mortgages 50% down/due in 5 years 1930 s Great Depression New Deal 1934 FHA is created Insurance Loan Standards 15-30 year loans with amortization

3. 1938 Fannie Mae created to increase amount of money available for mortgages Secondary Market Minimum standards for lenders Developed greater standardization for mortgages Attracted capital from other sources 1940-50 Growth in post war economy Creation of VA to provide homeownership to veterans Deposits in the east and mortgage growth in the west and southwest

4. 1968 Fannie Mae changed to privately financed dealing with conventional loans Ginnie Mae will be publicly financed and deal with government loans (FHA/VA/USDA) 1970 Freddie Mac created to compete with Fannie Mae Primarily conventional loans spurring growth of the private mortgage insurance industry

5. Early 1980s Regulation Q eliminated Growth of Money Market Funds Disintermediation 30 year fixed rate loan now bad asset Mortgage securitization finds new buyers Pools tranched IO/PO Time/Duration Credit

6. CDCU-97 Mortgage Program Property types: 1-4 Family (incl. deed restricted) and Manufactured Housing Fixed Rate Term: 20, 25, 30 Years Maximum LTV: 97%; CLTV: 105% Minimum Credit Score: 620 Debt to Income Ratios: Front end: 35%; Back end 45% Post Closing Liquidity: 2 months Primary Mortgage Insurance: Lender Exposure <=80% , but not less than 75% LTV Loans to members who currently hold Individual Tax Identification Numbers (ITINs)

7. The CDCU Secondary Market In 2016 the CDCU Mortgage Center introduced a Secondary Market specifically designed for the Low-to-Moderate Income Borrower. Participating credit unions have access to the CDCU-97 and the CDCU-ITIN Loan These loan programs were created based on the needs expressed by our Community Development partners

8. CDCU-97 FNMA Home Ready Freddie HP Advantage 97% LTV 97% - 95% if manual UW or man home 85% for 2-Fam - 75% for 3 to 4-Family 97% LTV No Income Limits Low Income Census Tract No Income Limits apply - Earn a maximum of 100% AMI (Area Median Income) High-minority census tract or designated disaster area - Earn a maximum of 80% of AMI with no location restriction Borrower Annual Income cannot exceed 100% of AMI. Higher percentage allowed in designated "High-Cost" areas. No income limits apply if the mortgaged premises are located in an "Underserved Area" Minimum 620 FICO 620 with DU Approve 680 for Manual UW Minimum 620 FICO with LP Accept - Manual UW, 660 Secondary Financing and DPA Allowed Only Affordable Seconds and DPAs meeting Fannie Mae requirements Only Affordable Seconds and DPAs meeting Freddie Mac requirements

9. INCREASE YOUR EARNINGS Approved Sellers have the option of adjusting the pricing on all loans sold to the CDCU Mortgage Center to earn a Servicing Released Premium ( SRP ). For every 1/8th (0.125%) increase to the published rate, the Credit Union will earn % (0.50%) premium up to 1.5% of the loan amount As an additional revenue source, Credit Unions can apply to retain Servicing Rights on all loans they sell to the CDCU Mortgage Center. Approved Servicers will earn a 0.25% Servicing Fee paid monthly

10. Join these and other CDCU Credit Unions that have been approved, or are pending approval to do business with the CDCU Mortgage Center.

11. CONTACT US If your organization would like to learn more about the CDCU Mortgage Center, or become an Approved Seller, please contact: