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Wisconsin CUs share view on foreclosures at hearing
MADISON, Wis. (2/19/09)--Two Wisconsin credit unions provided the credit union viewpoint on foreclosures during testimony last week before a state Assembly Financial Institutions Committee hearing, according to the Wisconsin Credit Union League. Bob Bruemmer, executive vice president of Landmark CU, New Berlin, and Brian Punty, CEO of Antigo-based CoVantage CU, shared how they and other credit unions in the state have worked to help their members avoid foreclosures and stay in their homes (The League Feb. 18). "I believe our willingness to work with our members is common among credit unions," Prunty told the committee. "For instance, credit unions contacted and responding had heartwarming stories of success working with their members to keep them in their homes. In short, credit unions believe taking care and working with member-owners is a vital part of their missions." He explained how the $678 million asset CoVantage CU tried to help those facing foreclosure by other lenders. "Last fall, our board approved a 'Rescue Refinance' program, which … allows us to extend loans to families who are in foreclosure with another lender, or to those in trouble due to an extreme rate increase under an adjustable-rate mortgage with another lender," Prunty said. He noted the credit union can extend money to people with lower credit scores and limited equity, provided the debt ratio is within the guidelines. "In the four months that we have adopted this program, we have saved three families from potentially losing their home to out-of-state lenders," Prunty said. Bruemmer also shared stories about how the $1.2 billion asset Landmark CU helped members avoid foreclosures. Last year, he said, members of a Hmong family needed an interpreter to translate the loan documents. "They had taken out an adjustable mortgage for $110,000 two years ago and that loan had a current principal balance of $130,000. Their monthly payment was not sufficient to pay the interest due and the difference was just added to the loan balance. Their ‘real’ payment had increased to the point that when the reduced payment option ended, there was no way for them to make the required monthly payments. "They came to us and we were able to refinance their mortgage with a fixed-rate loan, pay off the other institution, and save their remaining equity," Bruemmer said. To read the full testimonies, use the links.
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