RALEIGH, N.C. — Reaching out to members who may have been victimized by other mortgage lenders State Employees' Credit Union has developed new products to help them refinance and keep their homes, said the CU.
Starting in April as the meltdown was setting in, SECU sent letters to members offering assistance and developed a Mortgage Loan Tool Kit outlining action steps for them to take to protect their home and credit history. Now, the CU says it has begun to see positive changes, as over 200 families in the Tar Heel State have already realized substantial savings by refinancing their subprime loans. According to Leigh Brady, senior vice president, education services, refinanced mortgage balances already exceed $30 million in just three months.
SECU developed a 5-year adjustable rate mortgage with built-in payment stability and so members can budget accurately, allowing them to rebound from financial hardships, eliminating skyrocketing rate increases that usually accompany a subprime mortgage. Another new product is an AllSavers Mortgage, which offers a fixed rate of interest plus an opportunity for members to build for the future of their families via a high yield Share Term Certificate tied to the loan.
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A SECU press release quoted member Dorothy Evans who has no family in the area and several children to care for, "The opportunity to refinance out of a subprime mortgage was a miracle!" Her mortgage payment had continually risen over the past several years and was set up without taxes and insurance included, forcing Ms. Evans to use her tax refund each year to pay that expense.
She noted, "I wasn't able to breathe and worried that I would have to find a new place to live." After a friend sent her to SECU she ended up saving more than $600 a month on her house payment, which now includes taxes and insurance. "I am thankful for SECU–the credit union listened to my situation and helped me get my life back," she said.
SECU has long been at the forefront of fighting predatory lending, and reworking subprime mortgages into affordable loans–with clear terms and a borrowers ability to pay back–is the latest effort. SECU championed anti-predatory borrowing several years ago with options for check cashing operations and title car loans.
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