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 Quiet Governance Risk Credit Unions Should Talk About By Grant Sheehan, CCUE | CCUP | CEO, NCOFCU Having spent many years both serving on a credit union board and leading as a CEO , I’ve had the opportunity to see governance from both sides of the table. That perspective has given me a deep appreciation for the delicate balance that must exist between management, leadership, and board oversight. When that balance works well, credit unions thrive. But when it slowly shifts — often unintentionally — it can create governance weaknesses that regulators and examiners increasingly watch for. In conversations with governance professionals and through years of industry experience, one theme keeps emerging: most governance problems don’t begin with bad intentions or misconduct. They begin with boards that gradually become too dependent on management. This is rarely obvious at first, but in fact, it often occurs within high-performing organizations. But slight patterns ca...
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