Sperry Associates Federal Credit Union has run into trouble with its federal regulator, not long after discovering it had lost more than $9 million in a massive mortgage scam.

The National Credit Union Administration on Friday released an agreement it signed with the Garden City Park-based credit union. The agreement, signed last month, requires Sperry to take several steps to get itself in shape after losing $1.5 million last year.

Sperry has assets of $360 million, 8,000 members and three branches in Nassau County.

Regulators told the credit union it must be in the black by the end of this year. Among the steps it must take are writing off more than $3.1 million in bad loans, assessing whether its "management is capable of leading," and ceasing loan modifications.

Credit union officials did not respond to a request for comment.

Bankrate, an independent rating company, gives Sperry its lowest rating of one star out of five. It said Sperry has weak capital levels, a high level of bad loans and a low reserve to cover bad loans.

Sperry's problems came after it was one of several credit unions - many in the metropolitan area but some as far away as Florida - victimized by fraud at U.S. Mortgage/CU National Mortgage of New Jersey. The company sold $140 million of credit union mortgages it didn't own to Fannie Mae and kept the proceeds. The company's chief executive, Michael McGrath, pleaded guilty to fraud and is awaiting sentencing.

Sperry lost $9.2 million in the case. Suffolk Federal Credit Union of Medford lost $33.8 million, more than any other, but its stronger condition left it better able to withstand the loss. Suffolk is suing Fannie Mae to get its mortgages back.

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