One Customer's Call Changes Verity Credit Union's Mortgage Rate Policy

Keith writes:

My adjustable rate mortgage with Verity Credit Union is due to reset next month. As part of the note there is an option to convert to a fixed rate. The calculation of this fixed rate is clearly defined as equal to Fannie Mae’s required net yield for a 30 year fixed rate covered by an applicable 60-day mandatory delivery commitment plus five-eighths of one percentage point, rounded to the nearest five-eighths of one percentage point. So take the Fannie Mae 30 year 60 day rate add 5/8ths and round to the nearest eighth. The note said the note holder got to decide the day of the rate but Verity was nice enough to let me pick which day I wanted as long as I gave them 15 days notice before the reset date. I patiently watched the rates every day and fortunately right before I was to give them notice rates were steadily declining…

I called to verify everything but was given a conversion rate which was 1/8th higher than I expected. I quickly double checked my math and found no mistake. I started asking questions, like where did they get the Fannie Mae rate which was rounded up to the nearest 1/8th. The lady did not know where the rate came from just that her rate sheet said what it said. I then went above her to a supervisor and posed the question why was the rate being rounded up to the nearest 1/8th when the Fannie Mae rates are not rounded at all. She was puzzled as well and asked for the website that was publishing the daily rates I was seeing and told me she would look into this.

The next day I got a call telling me that they had redone their procedures/policies and from now on would be calculating their conversion rates how I was doing it. Oddly enough I was apparently the first person to ever question or notice this discrepancy. In the end we are only talking about $15 a month difference but the lesson here is to always do your research and only work with quality establishments.

The daily Fannie Mae rate can be found online here.

Sure, but $15 a month can add up to a lot over time. That’s amazing that they took your inquiry seriously, then someone with a brain looked into it and then actually changed their policies based on your call. You would never expect that from a brand name bank. No wonder people are always spamming “CREDIT UNION, CREDIT UNION,” in our comments whenever we post a negative bank experience.

Comments

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  1. char says:

    Credit union. Fuck yea. After years of great service at a CU in CA, there’s no CU that will take me here in NYC that’s within walking distance :(. I still have that CA account, I’m hoping I can get my eventual home loan from them, even if it’s out of state. Probably not though :(.

  2. Antediluvian says:

    Ben: you wrote, “they took your inquiry seriously” without a sense of irony or sarcasm, which is a direct contradiction of the Consumerist Style Guidelines. However, since you praised a credit union, your transgression is forgiven.

  3. Antediluvian says:

    Ben, I can’t believe you wrote “they took your inquiry seriously” without sarcasm or irony. This is in direct contradiction to the Consumerist Style Guide.

    You made up for it, though, by proclaiming the virtues of Credit Unions.

    :-)

  4. Antediluvian says:

    Curse you Gawker and your magic comments removing / randomly appearing AJAX!

  5. SacraBos says:

    And unlike so many other institutions, the really really did take your issue very seriously! What next? The check will really be in the mail? That man from the government really is here to help me?

  6. Jean-Baptiste Emanuel Zorg says:

    No wonder people are always spamming “CREDIT UNION, CREDIT UNION,” in our comments whenever we post a negative bank experience.

    Indeed.

    I generally avoid being one of the “Join a Credit Union” booster boys, but it really is one of the best financial moves you can make.

    Not long after I joined my current CU, a payroll goof put me in the position of writing a HUGE overdraft (nearly a thousand bucks). My CU not only paid the draft, they didn’t charge me anything at all. no fees, no fines, nothing.

    When I explained how surprised I was, they simply said “We know you’re good for it.”

    Combine that level of service with outstanding rates (my current car loan is at 3.5%) and there is no reason for me to ever go back to a bank.

  7. UpsetPanda says:

    Hurray for Ben’s concise summation of how this story ended, cause the OP lost me at “The calculation of this fixed rate..”

  8. JohnMc says:

    SPAM ALERT SPAM ALERT

    My last bad experience with a bank was in 1972. I have not dealt with one since. I have since dealt with 3 credit unions in my ‘banking life’ even served on the board of one. I would probably never go back to a bank for personal business.

    I even had a car dealer once attempt a bait and switch on financing. When I found out just before pick up told the manager its my CU or the deal is off.

    Most CU are very customer focused. If more people went to a CU rather than a bank. The banks might change their tunes.

  9. cmdr.sass says:

    I worked at the oldest CU in the US for a few years back in the early 90s as a French-speaking teller and in the small call center. Let me tell you that the people I worked with were thrilled to provide good service. If we could make your day in some way, we did it. I closed my own bank account after my first day of work and never went back to another bank.

    If you use a bank, you really are a sucker. They offer not one advantage over a credit union.

  10. deadlizard says:

    This is one thing people don’t understand about credit unions: You
    join a credit union, you become a shareholder. Credit unions have to
    answer to YOU, so there’s no point for them to get greedy, like banks.

  11. PølάrβǽЯ says:

    @Antediluvian: You should know by now that if you post a comment and it doesn’t show up, just wait a while and it will.

  12. rouftop says:

    What are the downsides of joining a credit union?

  13. GearheadGeek says:

    @JohnMc: Actually they’d sing the same tune, just louder. Commercial banks have been fighting credit unions for years, but not by giving competitive products and services, they just try to get laws passed that keep most people from joining credit unions.

  14. GearheadGeek says:

    @rouftop: The downside for most CUs is that they have few branches and are local or regional. (There are exceptions, such as the armed services credit unions.) For people who live from ATM transaction to ATM transaction this can get expensive.

    Some CUs are members of ATM networks so you can find fee-free ATMs even in cities without a branch of your CU.

    So it’s mostly a logistical issue.

  15. rouftop says:

    Thanks, GHG. I started a forum thread in hopes of getting a little more attention: [consumerist.proboards88.com]

  16. Bunklung says:

    CREDIT UNION, CREDIT UNION

  17. ColoradoShark says:

    @GearheadGeek: Several credit unions around here are a member of the “CO-OP” network. Recently the ATMs in 7-11s became part of the network. So, I can stop in any 7-11 and do a fee free withdrawal. That is about convenient as it gets!

  18. tk427 says:

    GearheadGeek is right about the local/regional downside but if you do your homework you can find one that fits your needs. There is one national CU association that will give you info & locations for all their member CUs. I don’t know if this includes every CU in the US.
    You can also check out the individual
    state CU associations
    . I was surprised to find that there are about 30 in CT alone. You might find a branch hidden inside a hospital or sharing a location with another business close to your home/work.

    since I’ll probably never get away with this again:

    Credit Union FTW!

  19. Antediluvian says:

    @aaron8301: Yep, and normally I do that — so this time, I refreshed my current browser (Opera, which acts a little odd w/ the Gawker comment forms but not terribly so), closed, re-opened, opened in IE (from a new instance), and still no visible comment. In addition, I did NOT see the normal confirmation boxes saying “it’ll show up shortly.” I have successfully posted from Opera before. (And normally I browse with Firefox, but can’t for the moment for reasons that aren’t relevant.)

    So I re-posted my witty observation from IE.

    Notice the time stamps — they’re six minutes apart. I think that’s waiting long enough for it to show up after not seeing any submission confirmation, don’t you?

  20. RStewie says:

    CREDIT UNION! CREDIT UNION!

    I do it in person, too! “Ditch your bank, join my CREDIT UNION!” They don’t even pay me.

    Unless I don’t like the person, then “NO! Join Bank of America!! They’re WONDERFUL!”

    I’ve never been with a bank, and I have yet to hear about a Credit Union knocking someone down and taking their money and killing their dog, like all those freaking greedy bank people do.

    CREDIT UNION! CREDIT UNION!

  21. Osi says:

    No, I am with two credit unions. At times they are as a bad or even worse then a bank .. don’t believe the hype.

  22. Ectophensis says:

    I was going to say “Don’t believe the Jinx is more like it”, but I remembered that not all of my Credit Union experiences have been wonderful. The one I was with in California when I was in the service, Marine Corps West Federal Credit Union, was good when I joined but in about three years went horribly downhill. My last straw with them came when they charged me $5 because they got a piece of mail that they had sent me returned to them. That fee caused me to bounce a check, and then I was on the hook for the NSF and they absolutely didn’t care. I moved to Bank of America and was actually much happier.

    That being said, let me also say CREDIT UNION! CREDIT UNION!

    After I got out of the service and moved up to Washington State, I stayed with BofA, which up here was known as Seafirst at that time.

    Ick.

    I liked First Interstate until they became Wells Fargo. Washington Mutual treated me pretty fairly, but hands down the bigger credit unions (Boeing Employee’s, Watermark, Red Canoe, Verity) in the Seattle area are king. I have a Bank of America credit card solely because that’s my oldest piece of credit history, and even then I’ve been really tempted to just be done with that, too.

    As far as the logistical complaints with Credit Unions, the Co-Op shared branching deal is good for over three thousand credit union branches across the country. My folks live in rural Alabama but there’s a credit union I can get my money out of right down the road. The nearest BofA, by contrast, is a hundred miles away in LaGrange, Georgia.

    Find a good credit union. It’s a lot easier and a lot better.

  23. goodkitty says:

    Is this really a credit union thing or is it just smaller organizations that make the difference? If BofA were only staffed by a thousand people, would they still be so evil (considering there are less people to hide behind or to pass the soggy buck to)?

  24. sharistorm says:

    Thanks for the love. We at Verity Credit Union do appreciate everyone in our mortgage and loan department. They are good folks who have worked hard for our credit union for a long time. It’s great to see them get such high profile praise.