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Two Carolina CUs help members refinance subprime loans
RALEIGH, N.C. (12/7/07)--Two Raleigh-area credit unions that serve state and local government employees are working to help their members refinance high-interest subprime loans. The $13.957 billion asset State Employees CU (SECU) and the $722 million asset Local Government FCU introduced outreach programs earlier this year. The programs have enabled about 500 homeowners to refinance roughly $69 million in home loans (The News & Observer Dec. 6). In May, SECU--which serves 1.3 million state government employees and their families--sent a mailing to 100,000 members, who the credit union thought might be having problems with subprime loans. The mailing also was sent to those members who obtained mortgages in recent years from another lender, without making a substantial down payment. Information on the type of loans that members took out was obtained through members’ responses to a SECU-commissioned survey. In a letter to selected members, SECU informed them that it had developed two mortgages to help those struggling with subprime loans. One mortgage included an adjustable-rate loan with a 6.75% starting rate that adjusts once every five years. Rates increase a maximum of 4.5% over the term of the loan. Local Government FCU, which serves 158,000 government employees and their families in North Carolina, offers the same two mortgages. The credit union sent a summer mailing to 18,500 members. To date, 432 SECU members and 50 Local Government members who were contacted chose to refinance. An additional 152 SECU members are in the process of refinancing.
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