Sun West and PenFed Announce Joint Reverse Mortgage Initiative
Friday, 19 March 2010 07:32
Pentagon Federal Credit Union (PenFed) and Sun West Mortgage Company (Sun West) today announced a joint initiative that allows PenFed to offer reverse mortgage services to its members. Under this new initiative, PenFed will initially market the federally insured Home Equity Conversion Mortgage (HECM) reverse mortgage to its members located in Washington, D.C.; Maryland and Virginia. PenFed expects to launch this product nationwide after the initial pilot is complete.
This development will be particularly beneficial to PenFeds members because the PenFed Reverse Mortgage eliminates the upfront origination fee - two percent of the adjusted property value - and the $35 monthly servicing fee, which are customary in the industry. Consequently, PenFed's competitively priced reverse mortgage will make additional home equity available to the homeowner.
"We have eliminated both of these fees because PenFed is committed to providing the best value to our members," says Shashi Vohra, vice president of business development for PenFed. "PenFed's HECM comes with no origination fee, no servicing fee, and a lower rate than is offered by most other financial institutions."
Sun West will provide systems to originate and service the HECM loans. Pavan Agarwal, executive vice president of Sun West stated that, "We work with numerous providers of the HECM product, and we believe PenFed's approach is a revolutionary, first-in-the-nation development. The bottom line is that seniors can now access their home equity at a much lower cost."
The HECM reverse mortgage is unique in that it allows senior homeowners who are 62 or older to borrow against the equity in their property. The borrower can use the funds in any manner they wish; for home repairs and improvements, medical costs, in-home care, education, and supplemental retirement income, with no obligation to repay the loan until they permanently leave their home. In addition, the borrowers estate will never owe more than the value of the home.
"The reverse mortgage could be an excellent way for many seniors to supplement their income. We have removed the majority of the upfront fees, and we offer a very competitive interest rate on the existing HECM reverse mortgage product. Overall, we believe this is an excellent opportunity for our members," stated Mr. Vohra.
About Pentagon Federal Credit Union
Pentagon Federal Credit Union, established in 1935, with more than 950,000 members, and assets in excess of $14.5 billion provides worldwide service to Army, Air Force, Coast Guard, Department of Defense, and Department of Homeland Security personnel; members of the VFW; employees or volunteers of the American Red Cross; and others in the military and their families.
For more information about Pentagon Federal Credit Union and to learn more about this joint initiative, visit PenFed.org
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