State Employees’ Credit Union Rolls out Consumer-Friendly Reverse Mortgage

RALEIGH, N.C.--(BUSINESS WIRE)--State Employees’ Credit Union (SECU) is pleased to announce a consumer-friendly reverse mortgage designed to help senior members utilize the wealth in their homes in the best manner. Setting it apart from other industry-standard reverse mortgages, the Credit Union loan 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!

“If you are considering a reverse mortgage, you should shop around and talk to a counselor to make sure you are getting the product that is right for you. Reverse mortgages are complex products and choosing the wrong one can cost you thousands of dollars and even possibly your home.”

Many older homeowners have a large amount of equity in their homes but still have a need for more income on a monthly basis to balance their budget. In some cases these homeowners do not qualify for typical home equity loans and need another option in order to stay in their home or help pay for home healthcare. One alternative is a reverse mortgage loan. 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. Borrowers 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.

Phil Greer, Senior Vice President of Loan Administration states, “SECU investigated the reverse mortgage marketplace and we saw numerous opportunities to provide this important product to our members, reducing the typical costs being assessed. Through reduced fees, a fixed rate of interest and a simple interest accrual method, we will provide the member with an enhanced use of their equity. This will result in more funds being made available to the member in order to assist with their day-to-day living expenses. The features of the SECU reverse mortgage are very consistent with our ‘Do the Right Thing’ philosophy.”

SECU sought assistance from various senior-affiliated organizations in designing a beneficial reverse mortgage product. To provide additional guidance and financial education on reverse mortgages, SECU also published a booklet for members to learn about the product. The booklet is available via the SECU website at www.ncsecu.org.

Mary Reca Todd, Manager of Supportive Housing for the NC Housing Finance Agency, comments on the helpfulness of certified counselors, “A reverse mortgage can be a useful financial option for some older homeowners who need to supplement their retirement income to help pay for essential needs. Since each homeowner's situation is unique and reverse mortgages differ significantly in payment options and fees, it is important to receive face-to-face counseling with a certified reverse mortgage counselor prior to applying for a loan. Certified reverse mortgage counselors in North Carolina are trained to provide consumers with information on reverse mortgage products and other services available to older adults that will help them make informed financial decisions.”

Mark Pearce, Deputy Commissioner of Banks for the State of North Carolina, adds, “If you are considering a reverse mortgage, you should shop around and talk to a counselor to make sure you are getting the product that is right for you. Reverse mortgages are complex products and choosing the wrong one can cost you thousands of dollars and even possibly your home.”

Ed Regan, Executive Director of the NC Retired Governmental Employees’ Association, remarks, “Seniors in the market for this type of product can be extremely vulnerable. There are media ads promising ‘too good to be true’ products that are ultimately not in the best interest of the borrower. Consumer education is crucial in making sure the older population does not fall victim to what could become the next frontier for mortgage scams. We are pleased SECU has developed a consumer-friendly product to assist NC’s retired state employees.”

Jerrie J. Lattimore, Administrator of the Department of Commerce’s North Carolina Credit Union Division, reinforces, “I strongly encourage all North Carolinians considering a reverse mortgage to investigate the available options, consult with family members and compare products in the marketplace.”

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 more than 1.4 million members, SECU provides services through 218 branch offices, 980 ATMs, two call centers and a website—www.ncsecu.org.