SEATTLE – A group of credit unions calling themselves the Credit Union Housing Roundtable has called on NCUA to make $1 billion of low-cost loans available to help consumers refinance troubled mortgage loans.
The proposal comes as banking regulators are preparing a plan to fund mortgage refinancings through banks for millions of homeowners facing foreclosure or in delinquency on their home loans.
"We think that credit unions are in a position to help and we ought to be able to create our own version that is not going to be at the taxpayers’ expense," said Gary Oakland, president of BECU, one of the organizers of the group.
"This is a collaborative response by the credit union system to get some solutions aimed at the consumers, rather than the financial institutions. Up to now, all of the solutions have been aimed at helping the institutions," Oakland told The Credit Union Journal.
The plan, submitted to NCUA Monday, would use money from the Central Liquidity Facility, the emergency loan fund managed by NCUA, to provide low-cost funds to credit unions specifically to refinance loans on a member’s primary residence. Investment properties or second homes would not be eligible.
The proposal comes at a time when the CLF has expanded from $1.4 billion to $40.5 billion, in order to accommodate new credit union liquidity needs during the ongoing financial crises. So there is adequate capacity in the loan fund to provide the capital.
The program would be run by a steering committee comprised of BECU’s Oakland, the CEOs of Bethpage FCU, Wright-Patt CU, Spacecoast CU and WesCorp FCU, two NCUA senior staffers and the head of the CLF.
Several other large credit unions are members of the Roundtable, was organized by PrimeAlliance, a mortgage CUSO majority owned by BECU. They include: Alaska USA FCU, Alliant CU, American Airlines FCU, Bellco CU, CEFCU, Eastman CU, First Tech CU, Pentagon FCU, San Antonio FCU, SchoolsFirst FCU, Star One CU, Suncoast Schools FCU, Wescom CU and Xceed FCU.
NCUA said it had received the proposal and is reviewing it. "Chairman Fryzel is open to dialogue with any responsible parties. No determinations or actions regarding this proposal have been taken," said John McKechnie, chief spokesman for the agency.
Fred Becker, president of NAFCU, said he thinks the proposal is worth exploring, but ultimately it is up to NCUA to approve.
