Credit unions have been an important avenue to homeownership for countless millions of American citizens, and credit unions must maintain commonsense oversight and protection of consumer-friendly credit union mortgage programs and fair and competitive access to the secondary mortgage market to meet their essential role in the housing industry. As a result, credit unions have long had the responsibility of acting as fiduciaries for the investment of the members’ funds. fiduciary obligations require that members exercise independent judgment in making investment decisions. When a credit union does not provide its members with such conduct, the organization may be subject to the action of the Federal Trade Commission (FTC) under the authority of the Consumer Protection Division of the Federal Trade Commission.
The basic difference between a direct union mortgage and a credit union mortgage is that the former has a higher standard of care when it comes to the loan officers involved in the decision to issue a Union mortgage. This higher standard of care generally requires Union mortgage lenders to obtain a waiver from the Federal Housing Administration (FHA) in order to process any Union mortgage application. A waiver will often be required because of the possibility of a defaulted loan on the property involved in the Union mortgage. If a loan goes into default, the lender loses its ability to collect any loan principal from the borrower, so the waiver will prevent the lender from foreclosing or taking any other legal action against the borrower. In addition, in order to process the Union mortgage loan, the lender must have reasonable suspicion that there is an inability on the part of the borrower to make payment of the mortgage obligation.
To obtain a Union mortgage, most credit unions follow a process known as “banking by contract.” In this process, the credit union collects information concerning the mortgagor and the property involved in the Union mortgage loan and then creates a contract with the mortgagor to collect the funds. A portion of the contract is the provision of lower fees for the Union mortgage. Credit unions use this portion of the contract to encourage borrowers to refinance their mortgages, or at least to consider Union mortgage refinancing. With Union mortgage refinancing, borrowers enjoy many benefits: lower fees, better terms, a decreased interest rate, and more.
Many mortgage lenders charge a fee for Union mortgage processing. The difference between the fees charged by different lenders and how much they cost are the main reason why credit unions are able to pass on the lower fees. These fees are passed on to you, the borrower, so you end up paying less in the long run. Here are some of the reasons why credit unions help homeowners with their Union mortgage refinancing:
– Lower fees. Most credit unions are exempt from the Real Estate Settlement Procedures Act (RESPA). RESPA makes it harder for mortgage lenders to engage in unfair lending practices. Because credit unions are exempt from RESPA, they are not subject to the same rules as other mortgage lenders when it comes to charging you forUnion mortgage refinancing.
– Better terms. When you work with credit unions, you benefit from their breadth of experience and knowledge about working with mortgage lenders. Since credit unions are non-profit organizations, they are able to provide competitive mortgage terms. Credit unions offer better mortgage rates and terms than national and local banks. Working with a credit union mortgage lending company that is a member of the National Association of Home Builders gives you access to several mortgage lenders that are willing to offer you competitive rates. As a result, your interest rates will be lower and your mortgage payment will be lower.
– Better closing costs. With a credit union mortgage, you’ll pay lower closing costs than if you went with a mortgage lender. A credit union mortgage lender often includes the closing cost into the mortgage, which means that the total cost of the mortgage will be lower. The cost of the mortgage will be higher if you go with a national or local mortgage lender.
– No points. If you choose to work with a union mortgage lender that is not a member of the NHA, you won’t pay any points. If you choose to work with a union mortgage lender that is a member of the NHA, you can count on paying higher interest rates, higher closing costs, and higher loan payments. You’ll be paying more for the mortgage if you go with a non-NHA union mortgage lender than if you go with a national or local lender.