The Public Corporation for the Supervision of Puerto Rico Cooperatives, or COSSEC as the entity is known in Spanish, said Tuesday that the island’s credit unions approved some $1.3 billion in mortgage and mortgage-related loans during the first quarter of 2015, for a combined portfolio of 18,385 financing agreements.
The sector saw a significant spike in FHA and Veteran’s Administration-backed loans, which reflected a balance of $18.8 million during the quarter, a 41.8 percent increase over the same period the prior year, said Daniel Rodríguez-Collazo, president of COSSEC.
Construction mortgage loans to individuals reached $16.7 million, up more than 8 percent and “other mortgage loans,” which groups diverse financing options for individuals or families, also recorded an increase of more than 7 percent, exceeding $68 million he said.
Rodríguez-Collazo attributed the increase to a number of reasons, including an improvement in the economic capacities of those families who have forged relationships with their co-ops over the years.
He said “it is this relationship with members and the community they serve that help cooperatives manage to develop a better understanding of the financial soundness of an applicant and the reality, necessity and merit of the mortgage loans granted, contrary to what that is palpable in other financial institutions.”
Moreover, he said this also influences the low default rate reflected by credit unions when compared with other financial institutions. The rate currently reflects less than 5 percent of arrears, which compares favorably with the 11 percent reported by the traditional banking sector.
One area where credit unions reported a decline is first mortgage loans, which neared $1.2 billion during the first quarter, down 1.76 percent when compared to the same period in 2014. COSSEC ascribed the drop to the fact that many loans were paid off this year.