<p>RALEIGH, N.C. – Members of State Employees Credit Union who have their mortgage loans with the $8.2-billion CU and want to take advantage of lower mortgage rates by refinancing their loans with the credit union, stand to realize a "substantial" savings in closing costs and time using SECU's new Mortgage Modification Program. Announced last month, the Mortgage Modification Program allows qualified SECU members to lower their existing mortgage interest rate without having to go back through the entire typical mortgage refinancing application process. The Mortgage Modification Agreement eliminates the normal closing expenses such as appraisal costs, attorney's fees and documentation charges members usually have to pay for as part of the refinancing process. "It also eliminates the paper shuffling members go through just to get a lower rate," said SECU Senior Vice President Phil Greer. The program is available to all members who have two and five-year adjustable rate mortgages with SECU. Although there is no limit to the number of times a member can take advantage of the Mortgage Modification Program, the only determinant is how often they're willing to pay as one-time processing fee of three-quarters of a percent of the outstanding loan balance. Greer said SECU decided to limit the program to members who want to modify the rate of their loans and not have it open to those who want to adjust the terms of their loans outward or inward or those who wanted to alter the terms of their promissory note because that would make the entire process too cumbersome. If, for example, there was a second lien holder on the property, it would require the credit union obtain their consent as well as that of the primary lien holder. In addition, adjusting the term of the loan would require making a modification to the stated maturity date on the deed on trust. But just because a member qualifies to use the Mortgage Modification Program doesn't mean it will make sense for them to apply to refinance their loan. "If a member has a $20,000 loan balance, even though they may get say a 2% break in their rate, it may not benefit them enough to recover the closing costs," said Greer. "But a member getting the same 2% rate break on a loan with a $100,000 balance will likely save enough to recover the closing costs quickly." SECU has about $4 billion in its mortgage portfolio, and Greer said refinanced loans accounted for about 65% of the loans the credit union made in the past 12 months. He did not have estimates on what portion of the refinanced loans were for loans originally with SECU, but he noted that "many" were from other financials. At press time, Greer said about 1,000 members had already taken advantage of the Mortgage Modification Program. -</p> <p>[email protected]</p>