VIENNA, Va.--(BUSINESS WIRE)--Navy Federal Credit Union announced today the marketing of its 5/5 Adjustable Rate Mortgage (ARM) product to large institutional investors. The ARM product is pooled into Freddie Mac mortgage-backed securities.
The product has a history of growth and stability at the credit union. Since 2015, the Navy Federal 5/5 ARM loan volume has grown by 11 percent and is expected to trend upward. Institutional investors benefit from the value Navy Federal and its members add through lower than industry average default and prepayment rates.
“This is the first time a product popular among credit unions and securitized by Freddie Mac is being marketed to large institutional investors with the direct intent of establishing a new and liquid market,” said Pete Amstutz, assistant vice president, Secondary Marketing, Navy Federal. “This is a unique opportunity both for us at the credit union and for investors, because it comes from some of the best borrowers of any financial institution: the military and their families.”
“We’re delighted to partner with Navy Federal,” said Chris Boyle, Freddie Mac’s Single-Family Senior Vice President of Sales and Relationship Management. “This transaction allows Navy Federal to offer the product to additional members in the future and helps us fulfill our mission to provide liquidity to the U.S. mortgage market.”
The decision to sell some of these loans allows members the continued benefit of lower rates while still receiving award-winning member service. Marketing its 5/5 ARM mortgages will help ensure Navy Federal can offer this product to other members in the future.
“The 5/5 ARM is for lenders that know and understand their borrowers very well and believe in their underlying credit quality. Borrowers gravitate toward this type of ARM because they are less exposed to interest rate swings,” said Amstutz. “Navy Federal has a reputation for having some of the lowest mortgage interest rates and we know our members very well - the combination is a natural fit.”
About Navy Federal Credit Union: Navy Federal Credit Union is the world’s largest credit union with more than $80 billion in assets, nearly 7 million members, 296 branches, and a workforce of over 14,000 employees worldwide. The credit union serves all Department of Defense and Coast Guard active duty, veterans, civilian and contractor personnel and their families. For additional information about Navy Federal, visit http://www.navyfederal.org.