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News Now

CU System
AVCU testifies on mortgages in secondary market
SOUTH BURLINGTON, Vt. (4/13/11)--Association of Vermont Credit Unions President Joe Bergeron testified last week before the state House Commerce Committee in support of a measure that would solidify Vermont lenders' ability to sell a mortgages involving private road properties on the secondary market. The bill, H. 272, was introduced by Reps. Bill Botzow (D-1) and Michael Marcotte (R/D-2), chair and ranking member of the committee. It is being advanced by the Vermont Mortgage Bankers Association (VMBA), which is headed by Jason Pidgeon, a loan officer at New England FCU, Williston. Pidgeon also testified in support of the bill (Newslines Express April 8). At issue is Fannie Mae's requirement for a documented maintenance agreement between property owners on private roads. Without an agreement, Fannie's guidelines look to a default agreement in state law. However such a law does not exist in Vermont, said AVCU. H.272 creates default agreement statutory language that goes into effect only when no other document exists. Bergeron presented results of a survey of the state's credit unions indicating that a lack of documentation is fairly common, causing potential underwriting issues for the lender with loans to sell on the secondary market. In aggregate, mortgage lending credit unions reported from 5% to 10% of their mortgage business involved private roads due to the rural nature of the state. Similar legislation passed the House last year but was not voted out of the Senate, said AVCU.


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