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.”
The National Credit Union Administration has finalized a rule to improve board and executive succession planning within the credit union industry. This strategic move aims to curb the trend of mergers driven by technological stagnation and poor succession strategies, ensuring more credit unions maintain their independence and enhance their technological capabilities. By Ken McCarthy, Manager of marketing communications at Tyfone Credit unions are merging out of existence because of an inability to invest in technology, the National Credit Union Administration Board wrote when introducing its now finalized rule on board succession planning. The regulator now requires credit unions to establish succession planning for critical positions in their organizations. But it’s likely to have even wider effects, such as preserving more independent charters and shaking up the perspectives of those on credit union boards. “Voluntary mergers can be used to create economies of scale to offer more or ...
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