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MERRILL LYNCH EXPANDS NEW PARENT POWER 100 PERCENT HOME FINANCING PROGRAM TO EAST COAST; OFFERS FIXED RATE MORTGAGES WITH NO DOWN PAYMENT

MERRILL LYNCH EXPANDS NEW PARENT POWER 100 PERCENT HOME FINANCING PROGRAM TO EAST COAST; OFFERS FIXED RATE MORTGAGES WITH NO DOWN PAYMENT
 NEW YORK, May 19 /PRNewswire/ -- Merrill Lynch Credit Corporation, the consumer credit and mortgage financing subsidiary of Merrill Lynch & Co., Inc. (NYSE: MER), today introduced its Parent Power(SM) program in New York, New Jersey, Connecticut and Florida.
 Parent Power is a new mortgage program that gives qualified home buyers the ability to finance 100 percent of the purchase price of their home and eliminates the need for a down payment. This is accomplished by having a qualified sponsor guarantee the amount normally required as the down payment but without the need for the sponsor to advance any part of the funds.
 Merrill Lynch Credit Corporation is also expanding the types of mortgages available with Parent Power to include fixed rate mortgages that will be funded through Fannie Mae (Federal National Mortgage Association).
 "This is an example of how Fannie Mae, working with another innovator in home financing, will help solve a very pressing and serious need -- the ability of young people to realize the dream of home ownership," said Donna Callejon, Fannie Mae's senior vice president for marketing and mortgage-backed securities.
 In California, where the program was introduced March 26, between 2,000 and 3,000 home buyers and sponsors requested information and applications daily in the period immediately following its announcement.
 "We see this program as a solution to two major concerns facing American families today," said Nassos Michas, chairman of private banking for Merrill
Lynch & Co., Inc. "The first is to once again make home ownership a reality for younger home buyers. The second is to do this without liquidating the savings and retirement assets of parents, grandparents or other qualified sponsors."
 Along with Parent Power, Merrill Lynch is also introducing its Mortgage Portfolio(SM) program, a variety of traditional mortgages both fixed and variable rate, in which Fannie Mae has agreed to invest. Fannie Mae is the nation's largest investor in home mortgages.
 This expanded line of mortgages will be available to all qualified home buyers in New York, New Jersey, Connecticut, Florida and California.
 "One reason we developed these programs was to help address the continued decline in home ownership, which is now seen as a serious national problem as well as an acute problem in the Northeast and Florida," said Michael A. Johnston, chairman of Merrill Lynch Credit Corporation.
 According to the Joint Center for Housing Studies at Harvard University, the home ownership rate for potential first-time home buyers ages 25-34 has decreased more than 17 percent from 1976 to 1990.
 "Based on the success of the Parent Power program in California and the anticipated demand in the East, Fannie Mae has agreed to fund $1 billion of loans, demonstrating both companies' dedication to helping individuals achieve the goal of home ownership. Merrill Lynch's Parent Power program is a pioneering effort that represents a breakthrough in mortgage financing," added Johnston.
 Charles A. Humm, senior vice president, Merrill Lynch Credit Corporation, pointed out that in the past, many homebuyers received financial assistance from parents or relatives to help with the down payment.
 "This often depicted the parent's savings or disrupted their retirement plans. With Parent Power, the parents can help their children buy a home without liquidating hard-earned savings. Meanwhile, those savings and assets are allowed to continue building, said Humm.
 How the Parent Power Program Works
 With Parent Power, qualified home buyers do not need a down payment. Instead, they obtain a qualified sponsor and apply for a mortgage based on 100 percent of the purchase price of the home. Merrill Lynch will provide the funds, with the only out-of-pocket expenses for the home buyer being the normal closing costs associated with the mortgage.
 The qualified sponsor such as a parent, grandparent or other relative, does not advance any portion of the purchase price. There is no need to give or
lend funds. Instead, the sponsor guarantees the additional amount of the mortgage that is provided in lieu of the down payment. In the event of a default on the home buyer's mortgage, the guarantee would be applied against a loss or related expenses, if any.
 "Like any financing program, Parent Power involves financial risks and has specific eligibility requirements for both the sponsor and the home buyer," noted Michas.
 "But since the sponsor only provides a guarantee for the amount representing the down payment and does not co-sign for the entire mortgage, the risk is reduced," added Michas.
 The guarantee can be established in two ways. First, by pledging eligible securities. These investments, which are placed in a brokerage account with Merrill Lynch, Pierce, Fenner & Smith Inc., will continue to work on behalf of the sponsor and any dividends, interest or capital appreciation will accrue to the benefit of the sponsor.
 As an alternative, in most states where Parent Power is being introduced, the guarantee can be established with a home equity account secured by a mortgage on the sponsor's primary residence. In New York, however, the Parent Power program is available only with the securities guarantee.
 For more information on the Parent Power and Mortgage Portfolio programs, contact a financial consultant at a local Merrill Lynch office or call Merrill Lynch Credit Corporation at 1-800-854-7154.
 -0- 5/19/92
 /CONTACT: Fred Yager of Merrill Lynch & Co., 212-449-7355/
 (MER) CO: Merrill Lynch Credit Corporation; Merrill Lynch & Co., Inc.;
 Federal National Mortgage Association ST: New York, New Jersey, Connecticut, Florida IN: FIN SU: PDT


GK-SM -- NY028 -- 1734 05/19/92 10:59 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:May 19, 1992
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