FOLSOM,
Calif., July 15, 2024 /PRNewswire/ -- SAFE Credit
Union Chief Lending Officer Tiffani
Vargas says a new pilot program by Freddie Mac to purchase
second mortgages will provide a new and affordable way for
homeowners to tap into their equity.
The Federal Housing Finance Agency (FHFA) approved in June a
limited pilot program with Freddie Mac to purchase certain
single-family closed-end second mortgages. Those who qualify will
be able to take cash out from lines of credit at new rates with the
government-sponsored lender.
"I do think that longtime homeowners who've built up significant
equity but perhaps are on a fixed income and are hypersensitive to
refinancing a first mortgage in order to be able to tap into any of
that equity … would benefit pretty significantly from a program
like this," Vargas says. "All and all I think it's great. I love to
see this kind of revolutionary thinking."
Vargas says she looks forward to seeing whether the pilot
program has a significant impact for homeowners and the lending
industry.
"I appreciate that it gets the conversation started and plants a
seed," Vargas says, adding a revised final offering could spur
Fannie Mae to follow suit with its own product. This would provide
borrowers with a low-cost alternative to cash-out refinance in
higher interest rate environments, she explains.
SAFE's chief loan expert gave her initial take on Freddie Mac's
proposal during a recent panel discussion, "Empowering Financial
Inclusion: Fintech-Credit Union Collaboration for Equity," where
she also advised credit unions to take a holistic approach in
reaching out to and supporting potential members with limited
banking experience.
"Certainly some of what drives us is members and them telling us
what they need, but it can be challenging to represent the folks
you want to have as members who aren't members yet if all you are
doing is listening to current member feedback," Vargas says.
About SAFE
SAFE Credit Union is a not-for-profit,
state-chartered credit union in Northern California with
over $4.6 billion in assets and more than 236,000
members. Insured by NCUA
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SOURCE SAFE Credit Union