In the News...Economic Volatility
Recently, there has been considerable press devoted to softening economic conditions and the subprime mortgage
practices of some financial institutions. (For more information about what subprime mortgage lending is, see below.)
As your Credit Union, we want to assure you that we do not
and have not engaged in any form of subprime mortgage lending. Subprime mortgage lending is not consistent
with our philosophy. Our goal is to offer products and services that help our members prosper and protect
their long-term financial well-being.
This philosophy also protects our long-term safety and soundness. Since we have not engaged in subprime
mortgage lending, our loan portfolio is of high quality. We maintain one of the lowest delinquency rates
of any credit union in the United States, and we maintain loan loss reserves well above the regulatory
requirement.
Our investment practices are also very conservative and of the highest integrity; they meet or exceed all legal
and regulatory requirements. Our investments are in triple A rated U.S. Government backed securities and certificates
of deposit.
We continue to receive the highest possible ratings from our federal regulatory agency and our independent
auditing firm for financial strength, safety, soundness, liquidity, service, and overall management. These agencies
continue to commend us for our success in building capital and reserves which allows us to remain strong and viable
under all economic conditions.
Our mortgage team remains available to meet the mortgage borrowing needs of our members. If you are interested
in a new home or the refinance of an existing mortgage, we encourage you to apply. You will find our mortgage
products simple and straightforward. Our mortgage experts will assist you in the decision-making process, and they
will look out for you and your financial well-being.
Our loyalty and commitment to our members remains extremely strong. We sincerely appreciate the trust you place
in us. Please contact us personally if you have any additional questions. Thank you!
What is a subprime mortgage?
Subprime mortgages come in many forms but generally are riskier loans because they use non-traditional terms
and payment options and/or are granted to borrowers with credit difficulties.
Examples of subprime mortgages include:
- Option adjustable rate mortgages - offer very low introductory payments and also give borrowers
the option to defer a portion of interest payments until later years.
- Interest-only adjustable rate mortgages - these loans allow borrowers to pay just enough each
month to cover the interest owed on the loan, leaving the balance of the outstanding debt unchanged.
These mortgages have been very popular in high-priced real estate markets like California, Nevada, Arizona,
and Florida.
For more information on subprime mortgages:
