Freedom ARM Mortgage Launched by Waterfield Mortgage Company and Union Federal Wholesale

Waterfield Mortgage Company, the largest privately-held mortgage company in the United States, and its subsidiary, Union Federal Bank, have announced the recent addition of the Freedom ARM to their suite of loan products. The option adjustable-rate-mortgage product is now available to the Retail, Wholesale and Direct lending divisions.

The Freedom ARM has a 360-month loan term and is tied to the Monthly Treasury Average (MTA). The product includes a deeply discounted start rate, where the rate is fixed for the first month, then adjusts monthly thereafter. Up to four payment options are available to the borrower: minimum payment, interest only, 30-year fully amortizing and 15-year fully amortizing. These options provide payment flexibility to the borrower, enabling them to pay the amount that works for their current situation.

The Freedom ARM includes a payment change cap that limits the amount the minimum payment can increase. The change cap allows only a 7.5 percent increase over the previous year's minimum payment, alleviating payment shock to borrowers who elect to make the minimum payment each month. In addition, to further limit the effects of negative amortization, every fifth year - or if the unpaid balance of the loan increases to 115 percent of the amount originally borrowed (110 percent in New York) - the loan is "recast" or reamortized to keep it on schedule for payoff within the original term.

"We designed the Freedom ARM to provide more financing options to better fit our borrowers' needs," says Dave DePodesta, executive vice president of Wholesale and Correspondent Lending for Union Federal. "We created the change cap to alleviate the pressures and threats of option ARMs. Union Federal is committed to this product because we do believe it is the right product for the right borrower. Our sales force will only promote it with the borrower's best interests in mind."

About Waterfield Mortgage Company

Founded in 1928, Waterfield Mortgage Company, Inc. is the parent company of Fort Wayne, Ind.-based Waterfield Financial Corp., Union Federal Bank of Indianapolis and Waterfield Insurance Agency and is the largest privately-held mortgage company in the country. Waterfield Financial Corp. has Retail branches throughout the United States.

Union Federal Bank's Wholesale division, a subsidiary of Waterfield Mortgage Company, Inc., also provides wholesale originations nationwide. Union Federal Bank, founded in 1887 in Indianapolis, Ind., is backed by assets in excess of $3 billion with a servicing portfolio of more than $19 billion. Union Federal Bank offers table funding and closed loan purchases with products ranging from Alt-A with interest only features to new construction financing with one and two time closing options.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.