WASHINGTON — NAFCU praised the plan unveiled yesterday by NCUA Chairman Michael E. Fryzel to use $2 billion from the Central Liquidity Fund to pay for mortgage relief for low-and middle-income credit union members.
"As we have strongly advocated in the past, we believe it is critical that the health of the National Credit Union Share Insurance Fund is not jeopardized. NAFCU deeply thanks you for implementing a program that does not draw on funds from the NCUSIF and consequently place the NCUSIF at increased risk," NAFCU President Fred Becker wrote in a letter sent to Fryzel last night.
Under the Credit Union Homeowners Affordability Relief Program the credit union, in exchange for the reduced likelihood of borrower default on the mortgage, would also match the rate break, doubling the benefit to struggling homeowners, the agency said.
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Borrowers participating in CU HARP would be subject to eligibility standards, including income level, default or danger of default, and required occupancy. The credit union would have the option of setting the period of rate break (3 to 5 years) and would be able to create a 40-year maturity and/or reduce the principal balance to increase mortgage affordability.
The plan must be approved by the NCUA board, which has not yet scheduled a vote.
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