SEATTLE -- The CU Housing Roundtable has sent a proposal to the NCUA, asking to make $1 billion in central liquidity facility funds available to natural person credit unions to assist with problem real estate loans.
The group, led by executives from Tukwila, Wash.-based Prime Alliance Solutions, its majority owner the $8.5 billion Boeing Employees Credit Union and other players in the credit union mortgage lending scene, presented the Member Mortgage Relief Initiative to the NCUA Oct. 21.
MMRI aims to provide credit union members with short-term mortgage relief, while freeing up funds for participating credit unions, so they "can keep lending and helping more members."
If implemented, the initiative would deliver $1 billion, taken from CLF or other sources, to natural person credit unions through the corporate system.
"We think that's a legit use of a resource that is out there," said BECU President/CEO Gary Oakland, when asked about the possibility of accessing CLF funds for the project.
"It's the idea of using all elements--individual credit unions, the corporates, the CLF, the NCUA--to come up with a way that we can show what we're all about, which is diving right down to the member level and providing some real help," Oakland added.
The funds would be paid back, he said, and it would not be considered "bailout money." Rather, Oakland said, the roundtable group views the initiative as a way to help members, who wouldn't otherwise receive assistance, using available funding in an appropriate risk structure.
Credit unions could modify, pay off or bring current existing first or second real estate loans on primary residences only. Members must also be in good standing and be able to demonstrate economic distress.
The MMRI was born from a white paper entitled "Post-Subprime Housing Finance," which the roundtable presented to members on Oct. 17 during its annual meeting in Seattle. At that same meeting, the group presented two other papers, including one that explores ways to create a credit union-controlled secondary-mortgage market.
The group's Web site (http://www.cuhousingroundtable.com) states it hopes to have the program up and running as soon as Thanksgiving, a date Oakland said he's still aiming to make.
"The fact of the matter is, there have been a lot of solutions that have been implemented, in part, at the government level in very short periods of time," Oakland said. "Unfortunately, most of those solutions have focused on saving the institution, not the consumer. What we see here is an opportunity to use elements of the credit union system in a cooperative manner that's going to focus keeping members in their homes, rather than saving institutions."
NCUA Spokesman John McKechnie said the agency is open to discussions on the topic but "no determinations or actions regarding this proposal have been taken."