CalPERS suspends mortgage program for members
CalPERS suspended its program offering mortgages to members because of limited demand and rising costs. The California Public Employees' Retirement System said members have taken out more than 136,000 mortgages valued at more than $22.7 billion in the 29 years the system offered the program. But demand waned the past few years with between 1,000 and 4,500 loans annually since 2004, representing just a fraction of CalPERS 1.6 million members. "Over the past few years, there has been limited interest among our members in the member home loan program," said George Diehr, chairman of the CalPERS investment committee. "This change allows us to redirect our resources and reduce the risk to the fund." The system blamed the changing mortgage marketplace and severe financial downturn for the weakening demand. And while the numbers were low, "the amount of staff time required to operate the complex loan program has risen considerably." The program, which also suffered from an increasing number of delinquencies and defaults, allowed CalPERS members to borrow up to $18,421 against their retirement dollars for a down payment on a mortgages. CalPERS will honor all applications already in the pipeline and expects to complete this process by the end of March. CalPERS is the largest public employee pension fund in the country with total assets of about $218 billion. Write to Jason Philyaw.