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CalPERS UPDATE
January 11, 2011
All approved CalPERS (California Public Employees' Retirement System) lenders were notified recently that the home mortgage financing program has been suspended.
From the firm’s recent press release, one of the main reasons for the program’s discontinuance was that there had been limited interest among its members and also that management of it was costly at this level of volume. This lack of interest may have occurred during the past 12 to 24 months after CalPERS changed its program guidelines and, for one, eliminated the opportunity to obtain a lower interest rate if rates fell during a member’s 60-day lock period. In effect, this unique part of the program then standardized it with the benefits offered by other conventional programs.
In addition, CalPERS had taken an even more conservative stance than in the past with the interest rates it offered, and apparently members chose conventional loan programs offered through other lending choices.
The press release issued 12/13/2010 (and forwarded to CalPERS lenders in January 2011) stated that CalPERS had been averaging “only 1,000 to 4,500 loans per year since 2004,” an extremely substantial drop in volume. Also, it identified that the program had suffered an increasing number of delinquencies in its “Secured Personal Loan Program.” This Personal Loan Program allowed members to access up to 50% of their retirement funds for down payment or closing costs, and attracted many members to CalPERS mortgages. Without it and the 60-day float down opportunity, the CalPERS mortgages lost their unique attraction.
The discontinuance of the program does not affect any loans in process according to the press release. All are expected to close within 90 days. CalPERS members can be assured that many other conventional programs are available to them that will be as or more attractive than those most recently offered via the CalPERS Fund.
It can be a little disturbing to CalPERS employees to find that their own mortgage program has been suspended, but they need not despair. Mortgage programs are continually being improved and refined, and there are many conventional programs available to qualified applicants even if not administered by CalPERS. This is evident in the recent lack of interest in the CalPERS mortgages.
Personnel at The Mortgage House have been proud and pleased to have been a part of the CalPERS lending program since its inception. At one time it was a unique and special mortgage product. However, times change and so do loan guidelines and offerings. We are all experiencing that now and especially since the economic turbulence during the past three years.
CalPERS employees can rest assured they will be offered the best of what is available for them at The Mortgage House, to match their own unique requirements and circumstances.
For more information on these programs, please contact your local office below - click on the city name for more info about each branch. Or you can click on the button at the bottom of the page to fill out a short information form, and someone will contact you within 24 hours (or on the next business day if on a weekend).
We can lend throughout the state of California, and have offices conveniently located to serve you best!
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