The $81 million Musicians' Interguild Credit Union in Hollywood, Calif., is winding down its interest-only real estate modification loans because of NCUA pressure, the credit union said.
Last October Musicians' Interguild took a vocal stand supporting the three- to five-year mortgage loans, arguing that it was extending them to help hard-pressed entertainment industry members stay in their homes during the sharp downturn in California real estate values.
The near-dozen loans it extended totaling $5 million were offered as a stopgap measure until the economy improved, said Musicians' Interguild CEO Marc Jacoby.
Jacoby, whose 7,500-member credit union represents TV and film guild employees, professional musicians and Hollywood residents, argued last October that NCUA “under the guise of 'safety and soundness'” chose to use Musicians' as an example of what will happen to credit unions that choose the interest-only option for modifications.
The NCUA classified the loans as delinquent and sent in special examiners to Musicians' Interguild to monitor a policy change, Jacoby said. He said the agency is now supporting its current process of winding down the interest-only loans.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
