Affinity Plus Federal Credit Union Gains Experience, Enhances
Profitability Through Mortgage Securitization
When Affinity Plus Federal Credit Union (Affinity Plus) wanted to take a new approach to
their mortgage business, they looked to Freddie Mac for strategic mortgage
Based in St. Paul, Minnesota, Affinity Plus Federal Credit Union is the state’s largest
credit union with nearly 130,000 members, which primarily include state, and state
university employees, faculty, and students.
One way Affinity Plus serves their members is through a solid mortgage lending
program. With mortgage volume comprising 35-40 percent of their overall loan volume,
Affinity Plus’ mortgage holdings include $302 million of first mortgages – $170 million of
those loans are sold to Freddie Mac.
“While many organizations are downsizing their mortgage departments, Affinity Plus
Federal Credit Union’s mortgage demand is growing, and stronger than it has ever
been,” said Jeff Call, chief financial officer of Affinity Plus.
Benefit from risk-reward trade-off through active balance sheet management
Affinity Plus’ sustained profitability in light of current mortgage market volatility is in part
a result of credit unions’ overall tendency to take a prudent approach to mortgage
lending. However, Affinity Plus can also attribute their current mortgage business
success to ongoing portfolio management.
According to Call, the credit union is already in the practice of routinely examining their
“Given market fluctuations we [Affinity Plus] look to see how we can reposition ourselves
to avoid a negative impact,” said Call. “Having the option to sell our conforming loans –
particularly packaging seasoned mortgages – to Freddie Mac allows us to keep our
portfolio from getting too heavy.”
Affinity Plus’ recent portfolio opportunities have been with ARMs they are holding.
According to Freddie Mac’s Office of the Chief Economist, approximately $5