State Employees Credit Union's Reverse Mortgage Making A Difference
Posted: 04-10-2009 : RALEIGH, N.C.

Raleigh, NC – State Employees’ Credit Union’s (SECU’s) consumer-friendly Reverse Mortgage is proving to be the needed solution for some SECU members. The Credit Union has closed 50 Reverse Mortgage loans totaling over $5 million since August 2008 when the program was introduced.

A reverse mortgage is a loan against a residence to provide cash to assist with living expenses, typically in the form of a lump sum or fixed monthly disbursement to the borrower. To qualify, applicants must be 62 years of age, utilize the home as their primary residence and receive consumer education on the product from a NC certified reverse mortgage counselor. Borrowers who typically seek a reverse mortgage have a large amount of equity in their homes and need more monthly income to balance their budget, but may not qualify for typical home equity loans and need another option in order to stay in their home or help pay for home healthcare.

SECU’s loan is distinctly different from the typical industry-standard reverse mortgage as the Credit Union offers a fixed, stable rate of interest, a simple interest accrual method, a low origination fee of 1%, no mortgage insurance and no monthly service fees. SECU firmly believes the reverse mortgage market could prove to be the next subprime debacle and worked to be “ahead of the curve” in order to provide a different cost-effective industry leading product that others in the credit union system could emulate.

In developing their consumer-friendly product, the Credit Union consulted with the North Carolina Housing Finance Agency, North Carolina Commissioner of Banks, North Carolina AARP, the NC Retired Governmental Employees Association and Resources for Seniors – a counseling group for reverse mortgage applicants, for their expertise on reverse mortgages.

SECU member Oma McKee comments, “I think that the SECU Reverse Mortgage is a really great product. With the monthly amount I receive from my loan, I can pay off outstanding bills, and have the rest of the money for other things. The economy is not good now and if you have equity in your house, it’s a good way to help with bills and free up needed money. You don’t have to make monthly payments on the loan and that frees up extra money too. It’s great to know the Credit Union has a loan that can help senior members. We’ve worked hard all our lives and we have this house, so we might as well let it work for us now. I would recommend the Credit Union’s Reverse Mortgage. I’m really glad I got the loan.”

Phil Greer, Senior Vice President of SECU’s Loan Administration department states, “After extensive research of standard reverse mortgage products, the Credit Union developed a product far superior to the industry standard, resulting in more funds being made available to our members for their day-to-day living expenses. While this type of loan will not benefit all members, the ones who need this option can rest assured they are getting a product that will not be detrimental to their financial well-being.”

About SECU
SECU is a non-profit financial cooperative owned by its members. SECU has been providing the employees of the State of North Carolina and their families with consumer financial services for over 70 years. Currently serving 1.5 million members, SECU provides services through 223 branch offices, over 1,000 ATMs, 24/7 call centers and a website—www.ncsecu.org.