Pentagon Federal Credit Union (PenFed) and Sun West Mortgage Company (SWMC) announced a joint initiative that allows PenFed to offer reverse mortgage services to its members.
PednFed will initially market the Federal Housing Administration’s reverse mortgage program to its members in Washington, D.C., Maryland, and Virginia, with plans to roll it out nationwide after the pilot is complete.
The credit union will offer its members a HECM without an origination fee and the typical monthly servicing fee to make additional home equity available to the homeowner said a statement. “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.”
As part of the initiative, SWMC will provide systems to originate and service the loans said Pavan Agarwal, executive vice president of Sun West. “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 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.
PenFed will be able to offer the product to more than 950,000 of its members who have assets in excess of $14.5 billion. The credit union 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.