2008 saw a huge shakeout in the mortgage industry as those banks that profited off of subprime loans disappeared or merged with stronger institutions.
Now with the subprime business off the books and home prices discounted, banks that have a strong balance sheet are looking to loan. The profits subsidized by the government are making good loans highly profitable.
The Navy Federal Credit Union just announced they are increasing their lending to 6 billion dollars for 2009. Listen to their reasoning.
Mortgage originations totaled more than $5.7 billion last year — the second-highest year for originations in Navy Federal’s 75-year history.
“Navy Federal never engaged in sub-prime mortgage lending,” said Cutler Dawson, CEO of the Vienna, Va.-based credit union, in a statement. “As a result, we saw a strong ‘return to trust’ in 2008, and we’re committed to continuing that momentum in 2009.” via Baltimore Business Journal:.
This could be great news for the housing industry if banks are showing this much confidence in their lending ability.