CMG Mortgage Services has a steady investor/partner for its popular "Home Ownership Accelerator" loan product, but the nonbank originator is talking to a handful of mid-sized depositories that hope to portfolio HOA mortgages too.
"Over the past four months we've talked to five or six banks about buying the loans from us," said CMG president Chris George. (He declined to name the banks at this time.)
He stressed that CMG is more than happy with its alliance with Ameriprise Bank FSB of New York, its current investor. "But we're looking for alternative investors," he said. "Ameriprise has even given us a few names."
The HOA product is an 'A' paper "transactional" loan where the consumer deposits his or her pay check directly into a mortgage account which has the effect of dramatically reducing the loan's principal. The customer can then use the money in the account to pay bills.
By the time 2010 ends, the San Ramon-based CMG will sell more than $340 million of loans to Ameriprise. "They hold the loans on their books and service them," said George.
CMG is on track to originate $2.93 billion in all types of residential loans this year, a 9% gain from last year.
