University Bank in Ann Arbor, Mich., has acquired an additional 37.5% stake in a specialty finance firm which it already half owned.
The lender, University Lending Group LLC, originates residential mortgages for sale to secondary market investors. The bank, a unit of University Bancorp Inc., has owned a little over a 50% stake since University Lending began operations in May 2008.
In 2011, the mortgage lender originated more than $265 million in loans but lost $1.3 million compared with earning roughly $248,000 in 2010.
University Bank said that University Lending lost about $1 million relating to its decision to shutter its wholesale mortgage banking division.
University Lending also incurred additional costs in 2011 related to establishing retail residential mortgage production offices and hiring about 100 front- and back-office employees to staff them. The unit expects to originate more than $150 million of mortgages during the first half of 2012.
