Know of a Credit Union that will keep your mortgage / refiannced home loan?
November 16, 2011 3:30 PM   Subscribe

How / where can I take out a mortgage or refinance a house with a credit union that won't sell the loan to a big bank?

My mother-in-law and a co-worker want to refinance their houses - rates are great right now and they hate the big banks that currently own their loans. They want to refinance with a credit union and they want the credit union to keep the loan, or at least know that the loan won't (or probably won't) be sold to a big bank.

I know loads of credit unions offer good/great rates for mortgages and refinancing, but is there any credit union that will be likely to keep the loan?

I'm a credit union member and highly recommend them to others. We're all located in the San Francisco Bay Area (North Bay actually, think Sonoma, Napa, Santa Rosa, etc). I understand there are limits on membership in many CU's but most are pretty easy to get into so please don't hold back a particular CU based on membership limits.

I didn't find much help on but I might be missing something. It's mostly about checking/savings accounts, but mortgages are a big part of the equation (in my mind at least).

Thanks a million mefits!
posted by unclezeb to Work & Money (13 answers total)
Have you tried calling any of them?
posted by rhizome at 3:33 PM on November 16, 2011

My home mortgage is with First Tech credit union -- they do not sell their mortgages. They recently merged with Addison Avenue woch is the re-branded H-P credit union. While 1st Tech is a PDX-based CU, there should be Addison Ave branches all over No Cal. You might want to try them. The folks I worked with on my re-fi were really nice people too!
posted by elmay at 3:55 PM on November 16, 2011

2nding First Tech. List of their locations here, I'm not familiar enough with CA to know if any of these are close to you.
posted by rabbitrabbit at 4:00 PM on November 16, 2011

Best answer: Pentagon Federal Credit Union has (or had at the time I got my mortgage) a bright line policy against selling its home mortgages.
posted by crush-onastick at 4:11 PM on November 16, 2011

Best answer: First Tech does sell the mortgage, they just continue to service it:
First Tech Federal Credit Union sells most of its residential loans to Freddie Mac. But it services all 27,000 of them from a 15-person department at its co-headquarters in the Bay Area.

It services loans partly because it's cost-effective for a credit union its size. But it also keeps the institution's name in members' minds the next time they need a loan, said Sue Siudzinski, First Tech's director of mortgage servicing.

Siudzinski said she now runs into borrowers who ask First Tech to keep the loan in its portfolio.

"That's a new occurrence," Siudzinski said. "They never used to care if we sold to Freddie Mac."
posted by 0xFCAF at 4:34 PM on November 16, 2011 [1 favorite]

Best answer: 0xFCAF makes a good point. You may want to research the distinction between owning a loan and servicing the loan; you are going to run into very, very few financial institutions of any sort that will originate the loan, literally hold it on their books, and service it, end-to-end.

The reason for this is that the most desired mortgage rate is the "conforming" rate, and the reason it's called conforming is because the property & mortgage must conform to certain Fannie Mae and Freddie Mac rules for verification, loan-to-value, down payment, etc. And the reason for this, in turn, is so that the loans can be securitized through those GSEs and re-sold on the secondary market.

If you do find an institution that will do the soup-to-nuts origination & servicing WITHOUT re-selling the debt, expect to pay a higher mortgage rate. Banks and credit unions view this as a type of putting all their eggs in one basket and so they insist on collecting a premium for taking the risk.

Personally I would settle for origination and servicing from a common, local institution because then you get the benefit of the conforming rate and also (hopefully) the benefit of being able to walk in and talk to the servicer if something goes wrong or you fall on tough times. Which I understand to be the main point of "not selling my loan to a big bank," though of course I recognize you could have moral justifications as well.
posted by rkent at 5:12 PM on November 16, 2011 [1 favorite]

Best answer: Good point about the distinction between holding and servicing the notes. USAA sells the servicing for a lot of its mortgages, although they continue to hold the note. Some of their servicers are shitty (like, the sort that charge you a monthly fee to pay electronically and don't have an easy way to reach them on the phone), but some are not.
posted by crush-onastick at 7:23 PM on November 16, 2011

Navy Federal Credit Union does not sell them. But you need to be military or DoD civilian to join, unless you have family who is already a member.
posted by ctmf at 9:50 PM on November 16, 2011

NFCU services their own mortgage loans, that is. I just went through the process last month and they had to provide a disclosure about that.
posted by ctmf at 9:52 PM on November 16, 2011

Best answer: I can add to the information about USAA. As of a few years ago, they had three servicing companies that they used. USAA holds the note, but if you have any questions about your mortgage or your monthly bill you have to talk with the servicing company. You can't pick the one you want -- they pick for you. PHH Mortgage is one of the three that they use, and their customer service is truly clueless and horrible which is quite a shock when you are used to USAA.
posted by Houstonian at 3:33 AM on November 17, 2011

Response by poster: Thanks for the great answers folks. I hadn't thought about the distinction of ownership vs. servicing; I expect servicing will be enough for the friends but ownership would be better.

@Houstonian: My coworker already has insurance with USAA so he'll be happy to hear about their policy (give or take according to the above post).

@crush-onastick: I've heard of PenFed re: their great credit card that's 5% back on gas, good to hear they're another refi/mortgage option.

@elmay & @rabbitrabbit: Addison Ave / First Tech looks like a great option, they even have a rewards checking account and good rates (3.875% 30 years with .375 points ... not great, but good for today at least). They have a few locations in Santa Rosa which is the closest to our area, so do-able if necessary, otherwise CU atms are everywhere (including basically all 7-11's which is still weird to me).
rhizome: Have you tried calling any of them?
Well, just a few but they all said that they reserve the right to sell the loan (and two said that's what usually happens). I thought it might be fruitless so I turned to Metafilter.

Great replies so far, please keep them coming!

posted by unclezeb at 6:49 AM on November 17, 2011

We just refinanced with Redwood Credit Union. Got a great rate and they keep the loan. We've been with them for years and have credit cards, checking, savings, and car loans with them. I highly recommend checking them out!
posted by Gusaroo at 8:03 AM on November 17, 2011 [1 favorite]

We just refinanced and the representative at closing specifically stated that they would service the loan for its life. They might sell it, but our payment will always go to the same place. This sounds like what most credit unions will do for the reason(s) stated above.
posted by Man with Lantern at 9:28 AM on November 17, 2011

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