CUs Come Up with Plan to Refi At-Risk Mortgages

The National Credit Union Administration has come up with a plan to refinance billions of dollars of at-risk mortgages by funneling new loans to credit unions through the Central Liquidity Facility, the lending arm of the NCUA. NCUA chairman Michael Fryzel said the agency has allocated $2 billion in loans to facilitate the Credit Union Homeowners Affordability Relief Program, or CU HARP, which could be expanded if its proves successful. Refinanced mortgages could carry rates as low as 1.75%, according to a report in The Credit Union Journal. "My principal reason for advancing CU HARP is simple," said Mr. Fryzel, "The consumer must not be left out of the broader government efforts to mitigate the housing and credit market dislocations." (Member credit unions own the CLF, which exists within the NCUA.) Credit unions believe they are not eligible for the Treasury's capital purchase program since they are nonprofits.