New York Bank Jumps into Warehouse Arena

Sterling Bancorp of New York is dipping its toe in the warehouse lending business, concentrating-not surprisingly- on Fannie Mae, Freddie Mac, and FHA-backed loans. The publicly traded commercial bank said it will focus on making lines of credit to only "established mortgage banking firms." Warehouse industry veteran Gary Timmerman has been hired to head the effort for Sterling. "Warehouse lending has historically been a successful product for a number of banks," said Sterling Bancorp CEO Louis Cappelli. "As the housing market has now begun to show signs of stabilizing, we see an opportunity to apply Sterling's capital, experience and market knowledge to fill this financing need and generate solid returns on our investment in the warehouse business." Over the past two quarters a handful of medium sized banks has entered the warehouse market, but at least one large player-PNC's National City warehouse group-is preparing to leave the business by this summer.