What Happened to the CalPERS Home Loan Program?

March 26, 2011

By ROXANNE CARR

All approved CalPERS (California Public Employees’ Retirement System) lenders were notified recently that the home mortgage financing program had been suspended.  Through the CalPERS program, active, inactive, or retired members of the California Public Employees’ Retirement system (CalPERS), Legislators’ Retirement System (LRS), or the Judges’ Retirement System (JRS) were eligible to apply for these special loans.

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  that management of it was costly at this low 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.  Taking out 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 with the interest rates it offered, and apparently members often chose other conventional loan programs.

The press release dated 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, and attracted many members to CalPERS mortgages.  Without it and the 60-day “float-down” opportunity, the CalPERS mortgages lost much of their unique attraction.

According to the press release, this discontinuance of the program was not going to affect any loans in process; all 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.  Mortgage programs are continually being improved and refined, and there are many conventional programs available to qualified applicants, even if not administered by CalPERS.

Personnel at The Mortgage House have been proud and pleased to have been a part of the CalPERS lending program since its inception, and of its commitment and high quality of service to CalPERS members. The Mortgage House decided to honor those members and its long history with the program by offering a “CalPERS Alternative Program.”

This program will allow CalPERS members an opportunity to obtain a home loan under almost identical guidelines as the original CalPERS loan program. It will include many of the familiar elements that made the CalPERS Member Home Loan Program so attractive, such as:

•    Competitive interest rates
•    Streamlined processing
•    Limited processing fees
•    SAME free 30/60 day interest rate locks
•    SAME start-to-finish service from The Mortgage House

For more information on this or any of the other mortgage programs available, you can call the San Luis Obispo office at (805) 782-6999 or the Santa Maria branch at (805) 922-8005.  Also, see The Mortgage House online at: www.themortgagehouse.com.