Even though PacTrust Bank, Irvine, Calif., announced it is entering the correspondent and warehouse lending businesses in the same press release, the lines of credit provided will be a traditional program, explained company executives who gave more details.
Pac Trust has hired Zoila Price to be president of the company’s new warehouse lending division. “The sellers are going to be able to sell their product to approved takeout investors,” she explained.
PacTrust will start funding loans through the warehouse and correspondent programs in March 2013. Jeff Seabold, managing director of residential lending, said adding the two programs will allow PacTrust Bank to move from originating jumbo product to agency loans through the third party channel.
Price added that it was coincidental that she, along with Ted Ray, president of residential lending and Rick Cassano, chief production officer, who head up the correspondent channel, were hired at the company in a short period of time.
Cassano added that Seabold recruited all of the new executives at the same time, with the aim of not only expanding the retail platform, which does business as Mission Hills Mortgage, but create the wholesale, correspondent and warehouse units as well.
Mid-sized banks such as La Jolla, Calif.’s Silvergate and Republic Bancorp of Louisville, Ky., who are recent entrants into the warehouse business, are already seeing payoff on their investment. Similarly, midsized banks and mortgage banks are becoming aggregators as alternatives to larger banks who had been concerned about the possible implications of Basel III.
Cassano said the large banks are the main correspondent providers and the refinance boom has led to a drop in service levels and an increase in turn-times. So PacTrust believes now is a good time for an organization which is “quick and nimble” to enter the marketplace, he continued.
Both Cassano and Price said they have built up relationships over their respective long tenures in the mortgage business and those contacts will be the starting point for the new channels.
As for the retail growth, Cassano noted that Mission Hills has 27 branches in four states and it is looking to add another 30. There is also a call center operation.
The third party channels and the warehouse business will provide credit nationwide.
Cassano said right now the wholesale and correspondent channels are buying agency and government loans, along with some jumbos, but PacTrust is working on some “interesting niche products” that it plans to introduce soon.
Robert Franko, CEO of PacTrust and president of parent company First PacTrust Bancorp Inc., said “Over the past several months PacTrust Bank has invested in developing and building robust, compliant policies, procedures and systems to ensure the sound launch of the warehouse lending division and the correspondent program. We have engaged outside advisors such as Garrett, McAuley & Co. to ensure our approach reflects today’s best practices, and, most importantly we have hired exceptional, talented leaders who understand how to run these programs prudently in today’s market environment.”
Price has 25 years of experience in the mortgage business, where she has developed and restructured three warehouse lending platforms. Joining her at PacTrust are Ninh-Thu Do, Elsa Boyd and Diana Galindo.
PacTrust will provide warehouse lines of $3 million up to $20 million; lenders looking for these credits will have to have a minimum net worth of $500,000.