A Credit Union Primer How we can serve REALTORS and their clients
Power Lunch Agenda • About Credit Unions • About American Eagle Financial CU • Mortgage Lending at American Eagle • TILA / RESPA Integrated Disclosure (TRID) • Questions American Eagle Financial Credit Union 2
Credit Union History • 1844: First Credit Societies in Europe • 1901: First CU in North America (Quebec) • 1909: First CU in US (Manchester, NH) • 1921: Filene, “father” of US credit unions • 1934: Federal Credit Union Act • 1970: NCUA formed (regulator/insurer) • 1980: First checking and IRAs, and removal of savings rate ceiling American Eagle Financial Credit Union 3
Credit Union Guiding Principles Member Owned Not-for- Better Rates profit Lower Fees Cooperative Credit Union Volunteer Common Bond Directors American Eagle Financial Credit Union 4
Credit Unions & Banks in the U.S. Credit Unions • 6,500 with $1.1 trillion assets • 102 million members (48%) • Navy Federal, $60.5 billion • Federally insured by NCUA Banks • 6,800 with $15.3 trillion assets • JP Morgan/Chase, $2.5 trillion • Federally insured by FDIC American Eagle Federal Credit Union 5
Credit Unions & Banks in Connecticut Credit Unions • 124 with $5.6 billion assets • 430,000 members • American Eagle $1.4 billion Banks • 45 with $94.3 billion assets • Peoples Bank $36 billion • United Bank $5.5 billion (3 rd ) American Eagle Financial Credit Union 6
Federal vs. State Chartered Credit Unions Differences between state and federally chartered credit unions are less significant than the difference between credit unions and banks. Federal Credit Unions – 61% • Not operated by the federal government • Regulated by National Credit Union Administration (NCUA) • Tighter membership parameters. • Insured by the National Credit Union Share Insurance Fund State Credit Unions – 39% • Not all states charter credit unions • Regulated by State Banking Dept. Familiar with local CU’s • May or may not be insured by NCUSIF American Eagle Financial Credit Union 7
American Eagle Financial Credit Un ion American Eagle Financial Credit Union 8
About American Eagle Financial Credit Union • 1935 : East Hartford Aircraft Federal Credit Union (P&W) • 1996 : American Eagle Federal Credit Union • 2006 : Granted 3-county Community Federal Charter • 2015 : Granted a 4-county Connecticut State Charter • 2015 : Became American Eagle Financial Credit Union • 2015: Began serving New Haven County American Eagle Financial Credit Union 9
About American Eagle FCU by the Numbers Full-service financial cooperative • Deposits, loans, investments, electronic services • 1 high school branch • 4 “in - plant” branches • 13 community branches • 300 employees • 107,000 members nationwide • $1.4 billion in assets American Eagle Financial Credit Union 10
AEFCU Membership Eligibility • Persons who live, work, worship, attend school, and businesses in Hartford, Middlesex, New Haven, or Tolland counties in Connecticut • $5 minimum deposit to open a Savings account • Makes you a member-owner eligible for all Credit Union products and services for life • Immediate family members also eligible (spouse, children, parents, siblings, and grandparents) American Eagle Financial Credit Union 11
American Eagle FCU Community Branches • Bloomfield • Newington • Cromwell • Plainville • East Hartford • Southington • Enfield • South Windsor • Farmington • Vernon • Glastonbury • West Hartford • Manchester American Eagle Federal Credit Union 12
Your Presenter Larry King Mortgage Loan Originator 860.568.2020, ext. 5350 860.461.6037 (cell) larry.k@aefcu.com NMLS# 555694 americaneagle.org americaneagle.mortgagewebcenter.com American Eagle Financial Credit Union 13
Building Your Home Buying Team Home Buyer (Client/Member) Real Estate Mortgage Real Estate Originator Agent Attorney American Eagle Financial Credit Union 14
AEFCU Residential Mortgage Program • Established in 1992 • Funded over 10,500 loans for $1.8 billion • Loans funded with member deposits • Loan decisions made locally in East Hartford • Loan files remain locally in East Hartford Member Resources • Management (2) • Mortgage Loan Originators (6) • Underwriters (3) • Processors and Closers (9) American Eagle Financial Credit Union 15
A True Local Lender Processing Funding Decisioning & Closing AEFCU Member Servicing Origination American Eagle Federal Credit Union 16
AEFCU Residential Mortgage Loans • Terms of 15, 20, and 30 year Conventional • Fixed-Rate • Adjustable-Rate (5/5, 7/1, 10/1) • Jumbo • Rate Lock Options • Low Down Payment / Low Closing Costs • First-time Home Buyer Program • Loan Pre-qualification American Eagle Financial Credit Union 17
Mortgage Pre-qualification • First step in the home buying process • Performed by Mortgage Loan Originator • Good for up to 120-days Three key items needed for pre-qualification 1. Credit Report / FICO score (hard inquiry) 2. Income verification 3. Asset verification American Eagle Financial Credit Union 18
Advantages of AEFCU Mortgage Insurance MI remains in place for a minimum of two years. After two years of timely mortgage payments and proof that the loan balance is less than 78% of the value, the borrower may request termination of mortgage insurance. American Eagle Financial Credit Union 19
AEFCU First-time Home Buyer Program • Primary residence • Minimum FICO = 620 • 3% minimum down payment • 30-year fixed or adjustable-rate • 60-day rate lock protection • Up to $1,500 credit off closing costs • Direct lender, local decision, and underwriting • Better alternative to government (FHA) loan American Eagle Financial Credit Union 20
americaneagle.org American Eagle Financial Credit Union 21
TRID Overview Jay Hershman jhershman@bhhlegal.com Baillie and Hershman, PC 290 Highland Avenue Joette Trinh Cheshire, CT jtrinh@bhhlegal.com www.bhhlegal.com 230.272.7000 John Fries jfries@bhhlegal.com American Eagle Financial Credit Union 22
Baillie & Hershman PC The CFPB, TRID, and YOU
IN GENERAL Dodd-Frank Mandates: Created the Consumer Financial Protection Bureau Replaced existing RESPA and TILA disclosures with a single disclosure to include information previously contained in two separate ones Proposed Rule - Issued: 7/9/12 Final Rule - Issued: 11/20/13 Implementation Date: NOW 10/3/15 (Maybe) CFPB invested heavily in consumer research Affects any purchase for a home (except ones not attached to land, a mobile home, or a HELOC) where a loan application is taken on or after October 3, 2015 by a creditor
TRID= TILA/RESPA Integrated Disclosure Impact will be felt by everyone in the closing process Buyers, Sellers, Realtors, Lenders, Mortgage Brokers Authority to assess fines Tier 1- $5,000 a day Tier 2- Reckless violation- up to $25,000 a day Tier 3- Knowing Violation- up to $1 million a day
Rule Forms 1) New “Loan Estimate” (LE) Replaces current GFE and initial TIL Three pages long Must be sent to the buyer no later than 3 business days AFTER making a loan application 2. New “Closing Disclosure” (CD) Replaces current HUD-1 and final TIL Five pages long Must be received by the buyer 3 days PRIOR to closing
The Loan Estimate (LE) Usually provided by lender or mortgage broker Must be Delivered or placed in mail within 3 “business days” of application (incl. Saturday if Lender open) and no later than 7 days prior to consummation ie when the buyer becomes contractually obligated on the loan Waiver of timing requirement is possible, but difficult. There must be a ‘bona fide emergency’ in order to waive the requirement
Page 1 of the Loan Estimate (a) General Information (b) Loan Terms (a) General Information If answers to questions in this section were “YES” different information (b) Loan Terms would be provided If answers to questions in this (c) Projected Payments section were “YES” different information would be Includes payment provided schedule & estimated taxes, insurance & assessments (c) Projected Payments Includes payment schedule & estimated taxes, insurance & assessments
Page 1 of the Loan Estimate continued… (d) Costs at Closing (e) Website reference Statement about & link to CFPB website
Page 2 of the Loan Estimate (f) Loan Costs (g) Other Costs Taxes, insurance, credits (h) Calculating Cash to Close Downpayment adjustments
Page 2 of the Loan Estimate continued… Adjustable Payment (AP)Table* (j) Adjustable Interest Rate (AIR) Table*
Page 3 of the Loan Estimate (k) Contact Information Broker Loan officer (l) Comparisons (m) Other Considerations (n) Signature Statement Signatures not required Different statements required depending on whether signature line is or is not included.
The Closing Disclosure (CD) Replaces the HUD-1 and final TIL Must be received 3 business days prior to consummation Provided by Lender or lender’s settlement agent, but Lender remains responsible for the accuracy of the CD
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