Citing limited usage and rapidly increasing costs the Board of the California Public Retirement System (CalPERS) has approved the suspension of the program that offered mortgages to it’s members. They say that over the last few years there has been little use of the program.
Once the suspension is fully implemented, the board will no longer accept mortgage applications, but those already in progress or completed will not be effected. Since the program began 29 years ago, more than 136,000 loans have been approved totalling more than $22.7 Billion. Although the program took a rather conservative approach to it’s lending policies (with mostly 15- & 30-year fixed rate loans) they have felt the impact of recent economic downturn and the finance world’s problems.
CalPERS is the largest public employees pension fund in the US with approximately $218 Billion in assets. The MHLP (Member Home Loan Program) allowed members to borrow against their retirement fund to make the down payment required when purchasing a home. With a membership of 1.6 Million the program wrote an average of only 1000 to 4,500 loans a year.
Our take? While we don’t expect this to have any great impact on our local market as a whole, anything that removes a tool from the bag will hurt some people. In this case however, for those that will be negatively impacted it should be minimal. If your lender does not have the ability to match something else for you, contact us by phone (530 315-2808) or email. There are other programs available that allow zero down payment and offer good interest rates. We have answers to your questions, or we will get them. We have set up a special hot line just for you at MortgageMaster@EncoreRES.com. Find out if you qualify today!
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