The Fannie Mae Product Lets Borrowers Make Automatic Payments Tied to Pay
Schedule, Allowing Faster Equity Build-Up
COLUMBUS, Ohio, Aug. 30 /PRNewswire/ -- Through Bank One Mortgage,
borrowers will be able to benefit from additional underwriting flexibilities
and build up equity in their homes faster by obtaining the "Working Mortgage"
starting in the Ohio market on August 30, 1999. The Working Mortgage,
introduced this summer by Fannie Mae (NYSE: FNM) which is the nation's largest
source of financing for home mortgages, will be available throughout Ohio
exclusively through Bank One Mortgage locations during the pilot program which
is expected to last approximately six months.
The product, known as the Working Mortgage during its pilot phase, sets up
an automatic deduction of a mortgage payment that matches the timing of the
borrower's weekly or biweekly paycheck. Withdrawing funds for the mortgage
payment with each pay period results in faster amortization of the mortgage,
allowing the borrower to build up equity at an accelerated rate.
"The Working Mortgage provides a unique solution for customers desiring
the benefits of payment convenience and faster equity buildup," said Paul
Swan, Chief Operating Officer of Bank One Mortgage. "Bank One Mortgage is
pleased to be the first lender to offer this product which Fannie Mae is
operating as a pilot for a 6-month period," Swan added. Fannie Mae expects to
expand the program during the year 2000.
Because Working Mortgage payments are deducted more frequently, borrowers
pay down the outstanding principal balance of the mortgage at a faster rate
than if traditional monthly payments were made, so they accumulate equity at a
faster rate. On a $100,000 mortgage with biweekly deductions, this rapid
equity appreciation translates into $4,000 of additional housing wealth for
the borrower after the first five years of the Working Mortgage, and almost
$10,000 within 10 years.
As part of the new Working Mortgage pilot, Fannie Mae has committed to
purchase $25 million in new mortgages from Bank One Mortgage. With an average
loan size of $80,000, this program could provide funds for more than 300 home
borrowers through Bank One Mortgage.
The innovative mortgage product offers borrowers a mortgage loan with
special benefits, including lower down payments, easier qualification rules,
and greater buying power. A borrower who obtains a Working Mortgage would set
up automatic withdrawals that coincide with their pay schedule -- weekly or
biweekly. The Working Mortgage is available only to those who use the direct
deposit option offered by most employers. The automatic deduction of a
mortgage payment also eliminates the hassle of writing and mailing a check for
a mortgage payment each month. After setting up a direct deposit account, the
borrower applies for a Working Mortgage through one of the pilot lenders, such
as Bank One Mortgage. The borrower agrees to have the mortgage payments
deducted from their checking or saving account on the same day their pay is
deposited.
Aegis Mortgage Acceleration Corporation of San Francisco, CA, was selected
by Fannie Mae to be the Automated Clearing House transaction processor for the
Working Mortgage. Aegis performs electronic Automated Clearing House
withdrawals and mortgage payment processing for more than 50 mortgage
servicers and 300,000 homeowners nationwide. "The Working Mortgage is a prime
example of how Fannie Mae and its lender partners are bringing change to the
marketplace and responding to homeowners' needs," said John P. Decker,
President of Aegis Mortgage Acceleration Corporation.
Those interested in more information about the Working Mortgage may
contact a loan originator at any Bank One Mortgage office throughout Ohio.
For general information on the Working Mortgage, call Fannie Mae toll-free at
800-732-6643 Monday through Friday, 9 a.m. to 5 p.m.
Bank One Mortgage is a division of Bank One, NA which is an affiliate of
BANK ONE CORPORATION (NYSE: ONE), which is headquartered in Chicago and is the
nation's fifth-largest bank holding company with assets of more than
$256 billion. BANK ONE offers a full range of financial services to
commercial and business customers, and consumers. It is the world's largest
Visa issuer, the third-largest bank lender to small businesses, one of the top
25 managers of mutual funds and a major national automotive lender. It
operates more than 1,900 banking centers and a nationwide network of ATMs. It
is a major commercial bank in the United States and in selected international
markets. It can be found on the Internet at http://www.bankone.com .
Fannie Mae is a New York Stock Exchange company and the largest non-bank
financial services company in the world. It operates pursuant to a federal
charter and is the nation's largest source of financing for home mortgages.
Over the past 30 years, Fannie Mae has provided nearly $2.5 trillion of
mortgage financing for more than 30 million families. More information about
Fannie Mae can be found on the Internet at http://www.fanniemae.com .
SOURCE Bank One Mortgage
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Related links:
http://www.fanniemae.com
http://www.bankone.com
Company News On-Call:
http://www.prnewswire.com/comp/084675.html or fax,
800-758-5804, ext. 084675
CONTACT:
Cormac O'Byrne, Senior Vice President of Bank
One Mortgage, 248-828-2311; or Kate Fralin of Fannie Mae,
202-752-6720
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