@DaveInAZ wrote:
@Anonymous wrote:I received an email early this morning indicating that I had a message available for me on my PenFed online account management:
"To protect us if you are in default on any credit extended or cash advanced under this account, you have granted a security interest in all of your shares, deposits, payments and dividends which may be received, whether held jointly or individually, up to the amount of your outstanding balance. The foregoing security interest includes the right to apply funds available to you in any jointly held account on your date of death. This does not include your individual retirement account (IRA). We may take all the shares needed by us to repay your credit extension or cash advance. If it is necessary to take all of your shares for the payment of this account, you understand your membership in PenFed may end. Collateral securing other loans with the credit union may also secure this loan."
Anybody else receive this? It is not a big deal (unless you default). Virtually every other credit union I have done businesses with has clearly stated that they own a security interest in my deposits upon default. I wonder if PenFed has seen an increase in defualts ever since they became the town bicycle. I kind of liked when they were a little more conservative.
I logged into my account early enough this morning that I noticed the new message notification & retrieved the notice before they could email me.
My reaction is "well, good". Penfed has been pretty conservative with me for unsecured CC limits as I have only modest (but adequate for me) income, semi-retired with early (age 62 for me) Social Security & part time job with the local county. I closed a Home Equity LOC with them in August that is under 80% LTV (loan to value) for their lowest interest rate (Prime rate +0). So now I can say to them "So look, in addition to my account balances securing the CC, it is now also secured by a security interest in my home". Waiting eagerly for the Oct. account review, I'm also interested in refi'ing a car loan with them.
Normally a CC having a security interest in my home would concern me, but with SS & 5+ years employment with the local county, job security and/or sudden loss of income is not a concern for the first time in my life.
I will have to look this up, but homes are typically excluded from this clause (I believe this is by law). Usually it's if other real property like auto, boat, motorcycle loans. If you default on an unsecured debt while they still hold the title to that property, then they can tack the debt on, making you have to pay it before they will release the title to your auto, boat, or motorcycle.
Current Score: Eq: 823 Tu: 830