Newspaper article THE JOURNAL RECORD

Housing Loans Led to Tinker Losses

Newspaper article THE JOURNAL RECORD

Housing Loans Led to Tinker Losses

Article excerpt

Journal Record Staff Reporter Tinker Credit Union's poor performance in 1987 was due to its non-performing loans in two housing developments, causing the addition of $2 million in loan loss reserves to the credit union's bottom line, said John May, president of the credit union.

The Midwest City-based credit union, the state's largest and the country's 16th largest, had a net income of $2.5 million at Dec. 31, compared to a net loss of $417,000 over the same period in 1987, according to the National Credit Union Administration, the federal regulator and insurer of credit unions.

The reserve provision entry on the credit union's 1987 balance sheet made the difference between a projected operations profit of $1.5 million and the $417,000 net loss that Tinker reported, May said.

The loss eminated from Tinker's assistance of two housing additions a half-dozen years ago, May said.

The additions Oakwood East in Midwest City and Pebble Creek in Edmond had homes in the $50,000 to $75,000 range, he said. Tinker financed the land, and the lots were developed by builders.

When members began having problems meeting their monthly payment schedules, the credit union decided to work with its members by adjusting the payments instead of repossessing the homes, May said.

"They were not technically performing as planned," May said, so the credit union had to reflect a loss.

Tinker's provision for loan losses, to cover any current and anticipated losses, had been about $3 million for both 1987 and 1988, May said. But an additional $2 million was added to the reserves stack to cover other real estate owned by the credit union, particularly the lost payments on homes in those two additions.

The credit union wanted its members to continue living in the homes, so that when their finances were straightened out, they would return to the old payment schedule, May said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.