Shawmut Sets Media Blitz For New Biweekly Loans
Shawmut Mortgage Co., one of the largest mortgage lenders in New England, is about to make a big push into biweekly loans.
Calling them the right product at the right time, the unit of Shawmut National Corp. plans to start offering the loans Monday.
Biweekly mortgages call for borrowers to make payments every two weeks, with each payment being half the size of a normal monthly payment. As a result, the loan is paid off much more quickly than a traditional mortgage.
While other lenders in New England offer biweeklies, Shawmut says that its push will be extraordinary. "I don't know of anyone that's promoting it the way we're going to," said Robert Brady, chief operating officer at Shawmut Mortgage.
Mr. Brady said a multistate print and radio advertising campaign is due to begin on Sunday.
An Easier Way to Repay Loans Early
"The market is right for this kind of product now," he said. "The speculators are pretty much gone from the real estate market [and] people are again buying homes to live in. When you look at it that way, the incentive to pay off early is there, and this is a pretty painless way to do it."
Though Shawmut has suffered heavily from the downturn in the New England economy, its home mortgage unit has remained active. Originations are currently running at about $1.25 billion a year, slightly ahead of last year's pace, Mr. Brady said.
Shawmut National Corp., which has dual headquarters in Boston and Hartford, sells the bulk of its new loans into the secondary market. Mr. Brady said that Shawmut will follow the same strategy with biweeklies, noting that securitization of such loans is on the rise.
In June, for example, the Federal National Mortgage Association began securitizing biweeklies for lenders around the country. So far, 18 lenders have committed to convert $500 million of the loans into securities, a spokesman for the agency said.