Bank Becomes First Provider of 'Harmony Loans'

1st Commonwealth Bank of Virginia has become the first to offer the Harmony Loan, a mortgage with a rate that adjusts downward at certain times if the borrower requests it, and has a patented ongoing compensation structure. The bank said it is offering the product as a 3/1, 5/1 or 7/1 adjustable-rate mortgage and will generally allow borrowers to lower their rate as often as every 120 days with a phone call so long as they have paid on time in the past and they meet certain rate reset parameters. Craig Chapman, managing director, mortgage services for 1st Commonwealth Bank of Virginia said it sees the loan as a means to strengthen relationships with both borrowers and loan officers. The loan was designed to mimic a competitive refinance without having to go through a full refi, according to Shane Chalke, president of Mortgage Harmony, Tysons Corner, Va. It aims to allow borrowers to reset their rates based on those rates' updated market values during the reset period.