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Holders of Whole Loans Get Another Market

Fort Washington, PA-A pair of exit alternatives for originators and holders of whole loans has come on line, as an affiliate of GMAC Financial Services here as well as a unit of First Chester County Corp., West Chester, Pa., have started initiatives in this area.

In the case of GMAC, the correspondent and warehouse lending division of Ally Bank has created a Correspondent Community Bank team, which will purchase closed residential mortgage loans from community financial institutions. The company will also offer these banks and thrifts a table funding service as well.

Meanwhile, the American Home Bank division of First National Bank of Chester County has formed a seasoned loan transaction team that will buy loans from financial institutions as well as other types of portfolio investors.

Running the operation at Ally Bank is Doug Miller, who most recently headed up a similar business at Taylor, Bean & Whittaker.

A GMAC spokeswoman noted that before Ocala, Fla.-based TBW collapsed, it had been very successful in getting market share for this line of business.

Matt Detwiller, a senior vice president in the correspondent and warehouse lending division, said the new unit would focus on getting business from community financial institutions that outsource some or all of their mortgage production process. It will customize services to supplement the client's in-house capabilities.

The company added it saw an opportunity in this line of business because market conditions have reduced funding alternatives for smaller institutions.

The spokeswoman added this business fits in with the correspondent and warehouse strategy (the company provides dedicated lines of credit for firms to originate whole loans to sell to it) because it looks to create relationships with other financial institutions at several touch points where possible.

"In addition to providing credit and purchasing loans, we hope to assist our business relationships in other ways, such as providing mortgage servicing, marketing, underwriting and operations support. We believe that many community banks, like our larger relationships, can benefit from these offerings," the spokeswoman said.

As for providing table-funding services, which is more traditionally associated with mortgage brokering, it allows the community bank to close the loan without using its own funds. "Very few correspondent lenders offer table funding, so we are providing a very valuable service by providing this liquidity," she said.

AHB, which is not related to the similarly named Melville, N.Y.-based company that shut its doors during the downturn, will have its team based in Fort Lauderdale, Fla., headed up by Maylin Casanueva.

Most recently she had a similar role at Redwood Financial Services and also has been the director of transaction management and due diligence services for CoreStates Securities and Meridian Capital Markets. She has experience in negotiating mortgage-backed securities and real estate mortgage investment conduit structures with both Fannie Mae and Freddie Mac.Other members have experience in banking, mortgage banking and capital markets.

James Deitch, managing director of AHB, said this allows the company to offer a full-range of services to its clients. The new business helps sellers "augment their capital base and increase liquidity, while at the same time provide them with efficient trade execution," he continued. Team members are able to perform such tasks as performing an initial data analysis from the servicer's tape plus verification, due diligence and execution of both servicing retained and servicing released loan sales.

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