RALEIGH, N.C. (3/2/11)--State Employees' CU (SECU) of North Carolina announced adjustments to three programs that will benefit its members. The programs include a revamp of its mortgage assistance program, lower interest rates on its payday lending alternative, and absorbing appraisal costs for home equity lines of credit and closed-end second mortgage loans. With North Carolina facing a $2.7 billion budget deficit, SECU, based in Raleigh, is finetuning its Mortgage Assistance Program (MAP) to assist state government employees facing potential job cuts. The program, in effect since January 2009, was developed to help members state in their homes during the recession. The program has helped 7,000 families. In MAP II, members who experience job losses can meet in person with a senior credit union office and develop an individual financial plan to meet primary needs and obligations on a limited budget, said SECU. To avoid possible foreclosure situations, members with a SECU mortgage loan have several options, including partial payment alternatives, mortgage loan modifications, refinances or possible extensions. Budgeting, financial counseling and overall debt restructuring are elements of the revised program. As a prelude to MAP II, SECU is identifying members whose current loan situations warrant a refinance and has implemented a number of lending changes to accommodate possible refinance situations. SECU also is enhancing its payday lending alternative potential for nearly 100,000 monthly Salary Advance Loan (SALO) participants. The maximum $500 loan product will lower the standard 12% interest rate for many of the program's regular users to a share-secured rate of 5.5%, reducing members' interest costs by more than 50% and saving members more than $400,000 in interest costs. The credit union is also enhancing SALO's savings feature, to increase participants' savings balances and earnings by more than $1.5 million. Members saving at least $500 will see their interest on the SALO drop to 5.5% from 12%. The reduced rate remains in place as long as the savings balance is $500 or more. SECU's required savings percentage will rise to 7% from 5% to increase members' chance of graduating from the program into other long-term savings programs. A typical $500 loan advance will now result in a savings deposit of $35 instead of $25. SECU is exploring the possibility of offering a low $100 minimum balance certificate as part of the program. In the third program enhancement, SECU will absorb the cost of an appraisal for home equity lines of credit and closed-end second mortgage loans. Earlier SECU waived first mortgage loan appraisal fees for members after finding that the cost of an appraisal often deters members who are contemplating a refinance. The change is expected to save members $1.2 million annually, said SECU, which hopes the enhancement will open the door for more refinances. The credit union also has:
* Reduced the lifetime cap from 8% to 6% for a two-year adjustable rate mortgage loans; * Increased the maximum loan term for used-vehicle loans to 72 months; and * Waived Department of Motor Vehicle lien recording fees for vehicle loans.