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Hey all,
Quick question. I had never heard of Cross Collateralization before I stumbled over another thread today.
I have both my wifes 2020 Civic and my 2015 F150 financied with NFCU, no lates or any other negative account history. I also hold 2 NFCU CCs (as does my wife) with $0 balances.
Let's assume that I need to run my card up $15k for some reason, and am making payments on that balance (lets say $1000 a month) While making the payments (lets say $12k still owed) one or both of the cars contracts end and they are paid in full.
Under this circumstance, would NFCU refuse to release the titles due to the CC balance, even if it is being serviced within the terms of the CC agreement? Or does the Cross Collateralization only apply when there is another deliquant balance with them?
This is nice information to have, since it might mean I would go to another of my CC lenders if I had an expense I needed to put on a card, so want to be sure that I have it clear.
Thanks!
I do believe that's only in the event of a deliquency will they claim any other accounts you have with them.
Plenty of people (myself included) only have credit cards + miniscule cash deposits with them or other CUs, it wouldn't make sense if that was the case since we wouldn't have anything else to secure the lines of credit.
Cross collateral is common with CU in general. If you are paying, cross collateral isn't even a issue. Cross collateral relates to defaulted accounts.
That's just the answer I was looking for.
Thanks!
I recently assisted my mother with this with a local CU here in Texas a few years ago. Grandmother had multiple accounts with her CU incuding an auto loan she took out for my mother. Upon her passing (accounts current at the time) the auto loan was immediately paid off. The other accounts sat for probate proceedings. Months later the CU claimed cross collateralization and wouldn't release title. We argued for a few more months for proof of loan docs but they were never able to produce anything or at least wouldn't.
So I ended up filing a complaint with the CPFB and about a month later title was released and mailed. My mom immediately went to transfer title into her name and had no issues. But going thru all this sure does make me worrisome about carrying multiple account types with any lender now.