ALEXANDRIA, Va., and DETROIT — NCUA liquidated the remains of the troubled Huron River Area Credit Union of Ann Arbor, Mich. on Nov. 17 and sold it to Detroit Edison Credit Union in a purchase and assumption transaction. The agency assumed control of $170 million worth of delinquent Florida real estate and a lawsuit related to the loans. NCUA then promptly hired DebtX, one of the nation's largest loan sale advisors for commercial debt to sell off a portfolio of $26 million in foreclosed home loans secured by properties in suburban Fort Myers, Florida.
The sale of some 100 loans were for properties located in single-family subdivisions in Cape Coral, Lehigh Acres and Northpoint, near Fort Myers. In a released statement, DebtX CEO Kingsley Greenland said, "The $26 million in residential loans for sale through DebtX represent a good opportunity for investors to acquire high-quality assets. We're anticipating strong demand from Florida investors, as well as those looking to diversify their portfolio. This is one of the largest credit union loan sales in recent memory."
The average FICO score of the borrowers is 692, the average loan balance is $261,000 and the average value of the home was $360,000 at funding. Investors can register to make bids at http://www.debtx.com or by calling DebtX at 617-531-3400.
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The remaining total of bad loans is some $140 million, and will revert to the agency's Asset Management and Assistance Center (AMAC) in Austin, Texas. John McKechnie, NCUA's director of public and congressional affairs, told Credit Union Times that NCUA "will continue to manage the process to protect the assets and the NCUSIF."
Michigan's state regulator placed the Ann Arbor-based HRACU into conservatorship last February when its financial condition worsened due to huge defaults on those southeastern Florida loans. The NCUA had been running the CU since then, but the financial condition was so grave that a P&A was the only option.
HRACU members' assets are secured and will transfer to DECU. Members will have access to its 77 service center branches. DECU has $485 million-in-assets and some 27,000 members. Huron River had $25 million-in-assets and 39,000 members. Now with combined assets of more than $700 million, DECU will become the 9th largest credit union in Michigan.
In a story from the Ann Arbor News, Bill Thiess, president/CEO of Detroit Edison Credit Union said, "The balance sheet has been scrubbed clean. This is almost the ideal situation from a financial standpoint." The CU attended a bidders meeting in August with eight other credit unions interested in buying Huron River, the paper reported. Thiess said that all Huron River employees will remain on the job.
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