The interest rate for a 30-year fixed-rate mortgage has hovered around the 3.0% mark for six months, making this a desirable time to buy or refinance a home. Indeed, performance data from the second half of 2020 shows refinancing is soaring at credit unions. At Star One Credit Union ($10.0B, Sunnyvale, CA), though, modifications are more popular than refis.
California’s fourth-largest credit union by assets is headquartered in the heart of Silicon Valley. It holds its first mortgage originations on the books so it can offer competitive terms both at the time of origination as well as later in the life of the loan. For decades, Star One has modified the interest rate and monthly payments on active loans in good standing upon request, driving loyalty among members.
All in all, the credit union’s real estate modification program boasts a process that is easier and more member-friendly than a refinance, says Victoria Tabler, Star One’s vice president of real estate lending. And there’s no limit on the number of times a member can modify.
For example, rather than paying closing costs and other fees for a refinance, borrowers pay 0.5% of their outstanding loan balance — with a minimum of $750 and a maximum of $1,500. The loan amount stays the same, the rate and payments go down, so the credit union doesn’t have to reverify the borrower’s ability to repay, which cuts down on time and labor expenditure.
“The process is easy,” Tabler says. “A member submits a request through our website, we review and prepare a two-page modification agreement, the member provides a single signature, and we make the change.”
In July, the United States will celebrate its 250th anniversary. The country’s last major milestone was 50 years ago, at its bicentennial on July 4, 1976. U.S. society has changed profoundly since then. Over the past five decades, the U.S. population has aged significantly, with the percentage of people 65 and older nearly doubling. The country has also become more racially and ethnically diverse, as growing shares of people identify as Asian or Hispanic. And following more than 70 million immigrant arrivals, the percentage of foreign-born people in the population has more than tripled. Americans are also less likely to be married than ever before. Women – who now have far more options outside of the home than they did in 1976 – have contributed to a boom in higher education and helped expand the workforce. And even though many Americans are financially better off than they were 50 years ago, econ...
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