Members of the $16 billion PenFed will now be able to change their mortgage rate without refinancing.
The loans were developed by the Mortgage Harmony Corp, which developed the software to allow the feature to be made part of PenFed's online mortgage applications for some mortgages.
“We are thrilled to be working with PenFed and serving their members with a product that promotes their economic interests,” said, Keith Kelly, CEO, Mortgage Harmony Corp. “We anticipate other credit unions will follow PenFed.”
Mortgage Harmony describes its “one click” feature to reset housing finance loans rates as primarily a means for credit unions and other mortgage lenders to retain their mortgage loans rather than see them refinanced when interest rates change.
“We are very excited to add this feature to our mortgage loan architecture,” said James Schenck, PenFed executive vice president. “Our company-wide philosophy is built around doing what is best for our membership and Mortgage Harmony’s Loan Retention Software, with the Rate Reset Protection feature, is consistent with that philosophy.”
For example, Schenck said, PenFed’s branded 5/5 Adjustable Rate Mortgage Rate Reset Protection product is consistent with the credit union’s long-standing goal to provide products tailored for members and their families.
Members using the service are able to change their loans rate with one click on the firm's secure web site and the submission of a an e-signature, all without further paperwork or additional out of pocket fees.
Vielka Asia, vice president of mortgage operations, said the option will allow PenFed to better allocate back office resources to originate new loans, instead of using resources to retain existing loans through refinances and modifications.