RALEIGH, N.C. – Local Government FCU said its mortgage refinance program aimed at helping subprime borrowers stay in their homes has refinanced $6 million in mortgages for 50 families.
“We understand that some people simply got into a bad loan product and were then faced with exploding interest rates and outrageous terms and conditions making it impossible for them to stay in their homes,” said Maurice Smith, president of the credit union. “We couldn’t just sit back and let that happen, so we came up with a couple of products that would offer a better solution for homeownership.”
The $750 million credit union began reaching out to potential victims of subprime lending over the summer with two new mortgage products, the Five-Year ARM and AllSavers mortgages. The Five Year ARM is a 20-year mortgage offering 100% financing up to $400,000 at 6.75%, subject to adjustment every five years. Increases are limited to 1.5% each increment with a maximum increase limit of 4.5% over the life of the loan. The AllSavers Mortgage is a fixed rate loan offering 100% financing, a 15-year term and a maximum loan amount of $400,000. A feature of the loan is that an additional 10% is financed to open a share term certificate with a rate equal to the mortgage loan.
