SAN FRANCISCO-CMG Mortgage Insurance Company has introduced its Foreclosure Prevention Advance (FPA) program, through which the company will contribute funds to help keep credit union members in their homes.
The FPA option, which is the newest component of CMG MI's CU Homekeepers program, requires members to have stable incomes and demonstrate a "commitment" to keeping their homes, the company said. Decisions are made within two business days, and funds are forwarded to servicers within 10 business days of formal approval.
Joel Luebkeman, spokesman for the CMG MI, told Credit Union Journal a key aspect of the program is its "flexibility."
"Credit unions can work with us creatively to help keep members in their homes," he said. "If borrowers have demonstrated they are committed to staying in the property, we can work with them."
One example of how the FPA program might work would be a member who experienced a temporary, short-term job loss that resulted in being three months in arrears on mortgage payments. Luebkeman said in such a case CMG MI would issue an advance that helps bring the member current, allowing the member to resume making ongoing payments. No repayment of the advance is expected from the member.
Continuing the same scenario, though, if the loan were to go delinquent again and CMG MI ended up paying a claim, the amount of the advance would be subtracted from the ultimate claim the CU files with the company, he explained.
How Advances Can Also Be Used
In addition to catching up on delinquent loan payments, Luebkeman said an advance could be used by the servicing credit union to fund a delinquent escrow account, to subsidize borrowers for a short-term period until they can get back on their feet, or even to reduce principal.
"We are putting borrowers on the long-term path to sustainable home ownership," he said. "I think we are one of the first that have done this within the credit union industry. The goal is to creatively keep members in their homes."
As a general rule, the program would be for mortgages that CUs have retained in their portfolios, because investor-owned loans would need approvals from several parties, Luebkeman added.
"The program has been enthusiastically received," he declared. "Credit unions like helping borrowers that are truly committed to staying in their property. The credit union will work with our loss mitigation folks to discuss situations. We work with credit unions on a case-by-case basis. You don't want to do it with someone who has moved out or otherwise is not committed. We encourage members to contact their credit union early in the process while they still have options."
Licensed in all states, CMG MI operates as a corporate joint venture between CMFG Life Insurance Company and PMI Mortgage Insurance Co.
For more information about the Foreclosure Prevention Advance program, see: www.cmgmi.com/fpa.