Freddie Mac To Buy Nearly All Delinquent Mortgages
NEW YORK-Freddie Mac said last week it plans to buy substantially all loans that are delinquent 120 days or more from its fixed and adjustable-rate mortgage-backed participation certificate securities. The move is a result of switching its accounting, as of Jan. 1, to conform to new standards that require financial institutions to hold all performing and nonperforming loans on their books, and to do away with off-balance sheet vehicles.
The company said it is cheaper to buy and hold these nonperforming loans on its books than it would be to pay guarantee fees to security holders. Initial analyst estimates put the unpaid principal balance on Freddie Mac's 120-days-plus delinquent loans at nearly $70 billion.
As an added benefit, Freddie Mac said the purchases will help to preserve its capital, and to reduce the amount it draws from the U.S. Treasury to sustain its operations. Freddie Mac will have to raise capital to buy out the loans, and this is expected to be done through the sale of its debt to investors and the sale of mortgage pools.
CUCorp Enhances Its Invest In America Program
LIVONIA, Mich.-In a move to bolster even stronger CU support for Invest in America, CUCorp is rolling out additional incentives for the car-buying discount program. The new "Private Offer" provides an additional $750 off GM vehicles when a member gets CU financing. Invest in America's standard GM Supplier Pricing discount of 5% to 10% off MSRP, still applies.
This additional discount, CUCorp CEO David Adams told Credit Union Journal, is to be used by credit unions for targeted marketing. "Maybe the credit union has a certain number of members who have car loans that are maturing. They can now offer them an additional $750 discount just for being a credit union member, and the credit union is guaranteed to get the loan if the member buys the car."
CUs can only make the offer to specific employee groups. From March 1 to April 30, the offer will be extended to healthcare professionals, May through June will be for education professionals, July through August will be for public service professionals, September through October will be for labor and trade professionals, and November through December will for military professionals.
To participate CUs must register for an offering 45 days in advance of its start date by either going to www.lovemycreditunion.org or by contacting Invest in America staff at CUCorp. Participating credit unions will be sent a marketing mailer to send to eligible members that includes a code so the member can come specifically to that credit union for financing to receive the discount.
CUCorp is a subsidiary of the Michigan CU League.
NM Deposits Could Go To CUs
ALBUQUERQUE, N.M.-This state's legislature has voted to move at least $2 billion from large financial institutions into credit unions and community banks. The New Mexico House of Representatives has voted 65-0 to approve a bill allowing the state to move between $2 billion and $5 billion in state funds to the smaller institutions. The bill still requires approval by the New Mexico Senate, but observers say that is likely. Gov. Bill Richardson has said he will sign the bill if approved.
Jailer Alleged 'Mumbling' Bandit
MEMPHIS, Tenn.-A former local jailer has been arrested here and charged with being the "mumbling" bandit who failed in two robbery attempts at credit unions last week. Phtosa Dennis, 42, has bee charged with bank robbery and using a gun during one of the crimes. Since 1997, Dennis has been employed as a jailer in Shelby County, Tenn. As reported earlier by Credit Union Journal, it is alleged that Dennis failed in her attempts to hold up two local credit unions on the same day last week because the tellers couldn't understand her, one time stumbling outside as her gun clattered to the sidewalk.
The bumbling bandit struck the first time at Southern Security FCU, but the teller couldn't understand the suspect's mumbling demands. The suspect then produced a hold-up note, which she flung at the teller before running from the building.
The hapless bandit then tried to rob a branch of First South CU, but she fumbled with her purse, then approached the counter after a teller asked several times if she needed help. The woman handed the teller a note, but the teller retreated when the woman pulled a gun. The would-be robber then ran from the credit union, tumbling on the sidewalk and dropping her weapon before leaving without any cash.
