A 3% mortgage in today's market presents an interesting problem for banks and credit unions.

The borrower has little incentive to move or refinance. The institution is left holding a below-market asset with little prospect of prepayment, while opportunities for new mortgage originations and deeper customer relationships are being missed.

Consider a borrower with a $500,000 mortgage at 3%.

That borrower may want to move, purchase a larger home, or refinance. But giving up a 3% mortgage makes those decisions considerably more expensive.

The result is mortgage lock-in.

For the institution, it means holding a low-yielding, long-duration asset while missing opportunities for new mortgage originations.

DREAM changes that equation.

Through an assumption and defeasance process, the original borrower can be released from the mortgage at a discount to the outstanding balance. On a $500,000 mortgage, a 10% discount means $50,000 in savings.

A successor borrower assumes the full obligation, supported by high-quality securities held in trust.

The institution improves the effective yield on its existing loan while creating an opportunity to originate the borrower's next mortgage at today's rates. No loan sale. No haircut.

And the borrower can take life off hold and move forward more affordably.

For institutions holding substantial portfolios of 3% mortgages, the opportunity isn't simply about improving the economics of existing loans.

It's about turning mortgage lock-in into new lending opportunities, stronger customer relationships, and improved portfolio management.

The opportunity has been sitting on the balance sheet all along. DREAM provides a way to get after it.

See what DREAM could mean for your mortgage portfolio.

Explore the opportunity at takara.finance.