Storm Busters

Credit union mortgage modifications keep the dream of home ownership alive in North Carolina.


With North Carolina facing a $3.7 billion gap in the state budget state for 2011-2012, as many as 21,000 state employees may lose their jobs this year, reports the Charlotte Observer. Such economic turbulence may be easier to foresee than a meteorological disruption, but the hard work and dedication required to survive and prevail in its wake is no less imperative. 

State Employees Credit Union ($21.5B, Raleigh, NC) doesn’t build storm barriers or extinguish forest fires, but when it comes to members' economic troubles, the credit union has positioned itself as a first responder and a stabilizing force in its local housing market.

The credit union’s mortgage assistance program (MAP) was first unveiled at the beginning of 2009, and has helped more than 7,000 North Carolina families stay in their homes through term extension, refinance, modification, or other options.  Now, SECU is ramping up for a second round of the program to help assist with any member job losses or cutbacks in the New Year.  

Modifications always present a unique challenge, even more so when the member is out of work, yet SECU’s past experience indicates it is up to the challenge.

Back in November of 2010, roughly one out of every 1,029 housing units in North Carolina had received a foreclosure filing, reports RealtyTrac. National foreclosure filings — including default notices, scheduled auctions, and bank repossessions — had increased 4% quarterly in the same period. But credit union members had a substantially better chance to beat the odds. Through active and ongoing modification efforts, SECU managed a foreclosure ratio that is less than two tenths of 1% of its total mortgages outstanding. 

One key to SECU’s success with member mortgage assistance is its preemptive approach, reports the Raleigh News & Observer. Loan officers contact borrowers at the first sign of trouble, so if a SECU member goes 30 days past due without making a payment, the officers establish communication and assume an advisory role for the member. 

From term extensions and partial payment deferrals, to modification or refinancing of the loan, there’s little that’s off the table in the battle to give members a viable chance to stay in their home and still make good on their financial commitments. 

With this policy, SECU effectively "turned our collectors into counselors," Mark Coburn, senior vice president of loan servicing told the News & Observer. Borrowers often wait too long to contact their lenders when they experience difficulties, so proactive marketing and outreach from the credit union provides them a fighting chance to reassess their situation before their options dwindle.

In turn, members are reaching out to SECU as soon as they identify a potential problem. A short-term payment workout followed by a permanent refinancing didn’t just keep one couple in their home following a job loss, it permanently saved them up to $150 a month on their loan, reports the paper. "It helped us keep our house," the 36-year-old member, Erik Cain, told the paper. "That's the ultimate thing."

Amidst a growing economy, credit unions such as SECU are making it clear their work with modifications will continue until every aspect of the hard-hit homeowner demographic can see the light of day once more.