The Alexandria, Va.-based credit union with over 1.2 million members and more than $16 billion in assets partnered with Mortgage Harmony Corp., to develop the software solution that provides a mortgage refinancing alternative.
Its Rate Reset Protection option enables eligible borrowers to reset and lock-in a lower rate on a conforming, jumbo and super jumbo five-year adjustable-rate mortgage "up to five times during the life of the loan," says James Schenck executive vice president of PenFed.
Borrowers can use to reset the loan interest rate through a customized website "with just a click of a button and a confirmation e-signature," he adds.
To qualify borrowers must be in good standing and have no rate resets within the prior 12 months. If borrowers select Rate Reset Protection beginning one calendar year from the date of the mortgage note, they have the option to adjust the interest rate periodically based on the terms of their note.
Benefits include easy access to lower mortgage interest rates, no fees to reset the rate, and no changes to the loan maturity date,which in turn eliminates the need for a new 30-year amortization requirement.
The reset feature enables borrowers to self-service the loan. It empowers borrowers and improves "what was once a very slow and cumbersome process for borrowers," says Vielka Asia, vice president of mortgage operations at PenFed.