State Employees Credit Union Offers Private Label Reverse Mortgage

SECULogo This week State Employees Credit Union announced that they are offering a new  “consumer-friendly” reverse mortgage to its customers.  According to the press release, their product sets itself apart from other industry-standard (FHA Insured HECM) by offering a fixed rate, 1% origination fee, and no mortgage insurance or monthly servicing fee.

Phil Greer, Senior Vice President of Loan Administration said, “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.”

What the press release doesn’t say is SECU’s reverse mortgage isn’t a federally insured product and doesn’t have the same protections as the HECM.  I called SECU and asked if they offered the HECM product or any FHA loans and they they said “no”.  When I asked why not they said that they weren’t FHA approved but they felt their product was a better alternative.

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As seniors continue to hear about bank failures and the bad economy you would think they would feel more safe with a HECM vs. SECU’s product.  To bad credit unions like SECU can’t use the reverse mortgage advisor program to offer an insured reverse mortgage anymore.

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

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  • I’ve reviewed SECU’s Reverse Mortgage program in detail and by far, it’s the best Reverse Mortgage program available … far better then the HECM and I wish I could offer it to homeowners who are researching HECM’s. It would benefit homeowners if other Credit Unions mimicked this program because it’s superior to any other program on the market today. It would be nice if HUD would review SECU’s program and modify the HECM accordingly.

  • I am trying to hook-up for a reverse mortgage. to your knowledge is there a new jersey state employees credit union website I could try. I believe only north carolina is offering rm for there credit union members.

    any advice is appreciated.
    Michael

  • I am concerned about this new product by the Credit Union….what happens when the CU uses up all the money it has ??? Does the CU sell these reverse loans to the secondary market to get their funds back ??I thought that CU only could loan out what money they had in deposits….
    What if the CU does get into trouble …who can bail them out ??
    I’ll continue to offer the HECM FHA loans and feel good about offering my senior clients a safe product that is insured .

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