Just received the following e-mail from our rep at First Mortage 12/16/10:
December 13, 2010
External Affairs Branch
Patricia K. Macht, Director
Brad Pacheco, Chief, Office of Public Affairs
Contact: Wayne Davis, Information Officer
CalPERS Suspends Mortgage Loan Program
SACRAMENTO, CA – Citing limited member usage and increasing costs, the Board of the California Public Employees’ Retirement System (CalPERS) today approved suspending the program that offers mortgages to CalPERS members.
“Over the past few years, there has been limited interest among our members in the Member Home Loan Program,” said George Diehr, Chair of the CalPERS Investment Committee. “This change allows us to redirect our resources and reduce the risk to the Fund.”
Once the suspension is in place, CalPERS no longer will accept mortgage applications. Loans currently in the pipeline are expected to be completed over the next three months. Members with existing CalPERS loans are not affected.
Since the Member Home Loan Program (MHLP) launched 29 years ago, CalPERS members have taken out more than 136,000 loans worth more than $22.7 billion. The program took a conservative approach to lending from the start, offering mostly fixed 15- and 30-year mortgages at market rates.
Still, the Member Home Loan Program has been impacted by the changing mortgage marketplace and severe financial downturn. Since 2004, the program has been averaging only between 1,000 and 4,500 loans a year, just a small percentage of CalPERS 1.6 million members and retirees. Despite the low numbers, the amount of staff time required to operate the complex loan program has risen considerably.
MHLP also has suffered from an increasing number of delinquencies and defaults in the Secured Personal Loan Program, which allows members to borrow as much as $18,421 against their retirement contributions for a down payment.
“Some borrowers have suffered during the recent financial crisis, so suspending the Member Home Loan Program allows us to concentrate on them while at the same time refocusing our limited staff on the overall CalPERS Fund,” said Joe Dear, CalPERS Chief Investment Officer. “In the meantime, anyone with an application currently in the pipeline has no need to worry. We’ll make sure those requests are properly processed as quickly as possible.”
CalPERS is the largest public employee pension fund in the United States with assets of approximately $218 billion. The retirement system administers retirement and health benefits for 1.6 million active and retired California State, public school, and local public agency employees and their families on behalf of more than 3,000 public employers. More information is available at www.calpers.ca.gov.
The last day to lock loans will be on Friday, December 24, 2010
OC Wholesale Branch
First Mortgage Corp.
2010, 2009, 2008
rates are rising and Down Payment Assistance Programs are being taken away due to poor economic condition of government agencies that fund them, not a good sign for housing market…