SALT LAKE CITY — The merger announced last week between the $2.4 billion Mountain America Credit Union and the $265 million Salt Lake CU is coming in for some critical scrutiny from the Salt Lake media over SLCU's portfolio of adjustable rate mortgages.
An article appearing in the Salt Lake Tribune questioned how the two parties were "quick to tout" the product and branch benefits of the consolidation but did not mention the "ballooning delinquencies" in SLCU's ARMS.
Financial documents filed with NCUA, said the paper, show Salt Lake CU had "an eye-popping $22.6 million in two month delinquencies by last December" as compared to only $315,0687 in September.
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The Tribune article also quoted Michael Moyes, the president/CEO, as explaining the past dues were the result of borrowers building their own homes but were not able to close out on their construction loans as planned.
Moyes maintained, said the paper, that the "loans were listed as delinquent mainly because those people failed to file the required extensions on time."
"I'm not saying there won't be homes in that group that we won't have to foreclose on," he said. But most of those loans, he said, "will be just fine. These loans are not becoming chronic long-term problems," Moyes was quoted in the Tribune article. The CU itself recorded a $3.7 million loss in 2007.
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