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01-10-2020, 08:13 AM
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77,341 posts, read 76,475,393 times
Reputation: 54327
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Quote:
Originally Posted by Lowexpectations
Biggest difference most don’t discuss is cross collateralization. Default on a personal loan at the credit union and they can foreclose on your house if they also hold the mortgage . Might not come up often but it’s a huge issue when it does
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this is extremely important to consider when using a credit union . i don't use credit unions at all so i think it was you who first made me aware of cross collaralization . |
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01-10-2020, 08:27 AM
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1,344 posts, read 648,802 times
Reputation: 2352
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Low, are the credit cards they issue also somehow “secured”? Ie, my friends wife had everything financial with a credit union when she died....mortgage, personal loans, credit cards. I thought my friend could have skipped out on the credit cards without jeopardizing the house, but the union scared him into paying those off too.
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01-10-2020, 08:50 AM
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Location: HoCo, MD
4,810 posts, read 8,397,215 times
Reputation: 5462
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Quote:
Originally Posted by Lowexpectations
Biggest difference most don’t discuss is cross collateralization. Default on a personal loan at the credit union and they can foreclose on your house if they also hold the mortgage . Might not come up often but it’s a huge issue when it does
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TIL.
Had no idea this was something to watch for. I guess it's a good thing my mortgage is not managed by my primary financial institution. But will certainly look for that clause moving forward. |
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01-10-2020, 08:51 AM
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20,246 posts, read 14,730,474 times
Reputation: 15554
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Quote:
Originally Posted by Cabound1
Low, are the credit cards they issue also somehow “secured”? Ie, my friends wife had everything financial with a credit union when she died....mortgage, personal loans, credit cards. I thought my friend could have skipped out on the credit cards without jeopardizing the house, but the union scared him into paying those off too.
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It’s certainly possible they were secured and cross collateralized, possible they weren’t. I wouldn’t be opposed to using a CU for a mortgage or heloc but I wouldn’t have more than one debt obligation at said credit union just to avoid a potential issue moving forward. |
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01-10-2020, 08:53 AM
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20,246 posts, read 14,730,474 times
Reputation: 15554
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Quote:
Originally Posted by macroy
TIL.
Had no idea this was something to watch for. I guess it's a good thing my mortgage is not managed by my primary financial institution. But will certainly look for that clause moving forward.
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It’s not an issue I’ve seen at banks although it may exist. It does exist in the CU structure. Think about it for a second, if CU are member owned, offer lower rates and give back their profits they have to reduce risk in a manner that a for profit center doesn’t. Cross collateralization does this well |
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01-10-2020, 08:40 PM
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Location: Berkeley, Denver, CO USA
14,705 posts, read 21,718,256 times
Reputation: 24750
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Really like my credit union. DCU.org
A member for 40+ years.
Largest network of ATMs. Never had trouble getting money in México or Western Europe.
Sub accounts. I love them. Make saving for specific things easier.
Responsive.
OK loan rates.
Business account in addition to personal.
Can easily share with other family members.
Great iPhone app.
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