State Employees’ Credit Union Helps Seniors with New Reverse Mortgage Product

(Special thanks to SECU’s Marlon Lewis for coordinating the visit with Arabelle and conducting the interview! Arabelle’s comments will be shared with the NC Congressional Delegation prior to Hike the Hill this month.)

Like many seniors, Arabelle Plonk’s home represents her financial security blanket. The 82-year-old Plonk, who has called her North Raleigh residence “home” since 1967, watches her finances very carefully.

A friendly sort with a quick sense of humor, Plonk has had her share of challenges over the years. Her husband passed away in 1970, leaving her with three children to raise and a home to maintain.

Having navigated those waters nicely, Plonk’s senior years have brought a new set of challenges. Things like home maintenance and health care costs combined to strain her budget and add stress to her life.

Over the past few years, Reverse Mortgages have been introduced to assist seniors like Arabelle. While they can and do help, many of these products come at a steep cost – some contain incredible servicing fees and other unfriendly terms.

To help bring some sanity and fair play to this line of the mortgage market, State Employees’ Credit Union has stepped up with its own Reverse Mortgage product. Unlike other lenders, the SECU solution comes with much lower fees and a much clearer understanding of the total cost of the product.

In the above video, Arabelle Plonk talks about how SECU’s Reverse Mortgage has helped stabilize her financial situation. Plonk, who previously held a Reverse Mortgage with another lender, now has financial flexibility and peace of mind that was missing before.

Instead of worrying about the cost of her prescription medications and home maintenance, she can instead focus her attention on her weekly ballroom dance classes and occasional nights out for dinner with friends — as it should be!  

SECU has closed more than 80 Reverse Mortgages since starting the program last fall. To their credit, SECU rolled this new product out just as the credit crisis was gaining a full head of steam. It’s another example of how credit unions are trying to help people in some very tangible ways during the recession.

With the Baby Boomers beginning to retire, products like this one will become more and more important to people who, like Arabelle, wish to remain independent, financially secure – and in their homes.

Home for the Holidays: SECU Helps Family Reclaim Solid Financial Foundation

As the year closes, the headlines are dominated by families encountering financial turmoil. The common themes in many of their stories include unemployment and home foreclosures. And while many of us share in the blessings of the Holiday Season and start thinking about the year ahead, others find themselves confronted by uncertainty and doubt — today and in the future.

George Clifton Young of Asheville can relate to these struggles. He and his wife Shirley encountered a series of financial setbacks in the 1990s. In 1991, Mr. Young was laid off from his job after 18 years of service. Because the job market in his career field was in low demand at the time, it took Mr. Young more than a year and a half to find a job offering a comparable salary.

As you might expect, this employment insecurity lead to financial distress. The family’s savings dwindled and their credit ratings took a hit. They struggled to hold on to their Asheville home, and had to eventually refinance the mortgage — but at a whopping 15% rate of interest.

As you might imagine, this mortgage became a heavy burden. And so, the family’s financial insecurity continued for many years.

But then in 1998, State Employees’ Credit Union was able to refinance the Young’s mortgage to a much lower rate and payment. In the years since, the Youngs have been able to rebuild their savings, build equity in their home and get back on their feet again financially.

It wasn’t charity – it was a real loan with risks. But the Youngs were hard working people, and their determination & character in the end mattered more to the credit union than a FICO score.

As the year draws to a close, I hope all families who are struggling can take a little comfort in the power of George and Shirley Young’s story. My wish for you is for brighter times and everything that you need to lead a happy & successful life.

And to the credit union people who work so diligently to serve people like the Youngs — thank you for all that you do to help people help themselves.

Happy Holidays.

Credit Unions Step in, Thaw Frozen NC Student Loan Program

(Edit 7/11 to clarify and correct: State Employees’ is the sole investor in the loan program. As part of the agreement, SECU and LGFCU members will get a reduced interest rate on NC EXTRA Education Loans. I regret the error.)

Over the last year, news about the credit crunch has largely revolved around subprime mortgages. But as banks and other institutions tighten their lending standards in order to repair their balance sheets, other facets of consumer lending have been impacted as well.

Here in NC, the loan money to help college students finance their education was threatened when the Auction Rate Securities market failed earlier this year. Since the agency that oversees many of these loans in NC uses the ARS market to access capital, students needing education loans were facing a lot of uncertainty in the upcoming school year.

Today, that uncertainty is gone thanks to State Employees’ Credit Union & Local Government Federal Credit Union. The credit unions invested $1.1 billion in the NC State Education Assistance Authority so that North Carolina students will be able to get loans at low rates.

Of course both these credit unions have been leading the pack on the credit crisis, helping thousands of NC families refinance out of abusive and potentially lethal mortgages. Even as the financial headlines darken, these credit unions are proving how powerful, positive and relevant a force the cooperative charter is.

The Raleigh News and Observer ran an article today detailing the credit union response to the loan program dilemma. You can read it by clicking here.