California Bank Re-Enters the Wholesale/Retail Space

Pacific Mercantile Bancorp, Costa Mesa, Calif., said it is re-entering the mortgage lending business — both in the wholesale and retail channels.In mid-2005 the bank exited the wholesale channel entirely, and severely scaled back retail residential. Company chief executive Raymond Dellerba said he expects an increase in home purchase volume and a correspondent increase in demand for residential mortgages as prices for homes begin to stabilize and the economic recovery begins. "Additionally, we believe that the credit quality of prospective borrowers will be much improved, because credit underwriting standards are being tightened and subprime and other high-risk mortgage loan products have been discontinued," he said. "As a result, we are planning to re-enter the wholesale and retail mortgage loan origination business, which we believe provides us with an opportunity to increase our revenues and profitability." He noted the previous wholesale and retail mortgage loan operations enabled the bank to increase revenues and improve profitability after the dotcom bust in 2000 and again after the attacks of Sept. 11, 2001.