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SECU sees low rate of foreclosures
RALEIGH, N.C. (10/19/11)--North Carolina State Employees’ CU (SECU), which makes mortgage loans to members in all 100 North Carolina counties, continues to experience a low rate of mortgage foreclosures. While the incidence of foreclosure has increased, the $23 billion asset, Raleigh, N.C.-based credit union currently has a foreclosure rate of less than one half of 1% of total loans, or roughly one-tenth of the national foreclosure rate. The main reason for the good foreclosure rate is SECU’s “face-to-face” Mortgage Assistance Program (MAP), which helps keep members in their homes, said SECU.
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SECU originates, services and “books” member mortgages. It has made the loans for more than 50 years, and manages about 100,000 individual mortgages with aggregate balances in excess of $11 billion. Also, the financial cooperative still uses direct, personal underwriting and does not risk-price mortgage loans. All qualifying members receive the same rate, regardless of credit score. Most mortgages are two-year adjustable rate loans providing manageable interest-rate risk for both the member-borrower and the credit union, said SECU. Launched in 2009, SECU’s MAP has helped more than 8,000 families remain in their homes when confronted by unexpected economic adversity. Members meet face to face with a senior credit union staffer to develop a workout plan to accommodate the member’s current financial situation. Options for workout plans include partial payments, loan extensions or modification/refinance. Historically, mortgage foreclosures have resulted from one of the five normal, life event “D-risks” of lending--death, disability, divorce, drug/alcohol dependency, or dis-employment. Most of the recent uptick in foreclosures at SECU is related to unexpected job loss in the current economy. “SECU’s low foreclosure rate is a direct result of the credit union working one-on-one with members to develop individual workout plans,” said Mark Coburn, senior vice president of loan servicing. “Foreclosure is always the worst choice for both borrower and lender. Meeting with members ‘face to face’ is at the heart of SECU’s Mortgage Assistance Program, and low foreclosures are a good measure of MAP’s success. “Who owns your mortgage can be of critical importance these days; SECU members know we’re local, we will listen, and we will work to help them overcome an unexpected economic shock,” he added.


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