Warehouse/Correspondent Program Started

Madison Equity Corp., Gibbsboro, N.J., has created a warehouse/correspondent lending program aimed at purchasing lower credit quality loans from small mortgage bankers.The company said among the segments it hopes to reach are the sub-500 credit score and foreclosure bailout markets. "Smaller mortgage bankers are feeling the squeeze of rising interest rates in the form of compressed revenue margins, yet until now structural barriers have made it unfeasible for them to expand into large underserved customer segments where attractive margin opportunities exist," said Jason E. Osborne, chief executive and president. "We are very pleased to combine Madison Equity's capital strength, our expertise in underwriting collateral-based loans, our experience serving mortgage professionals and our robust technology platform to provide a meaningful growth opportunity for smaller mortgage bankers." Madison Equity will offer warehouse lines from $1 million to $10 million that allows mortgage bankers to fund collateral-based loans in accordance with its underwriting guidelines. It will also purchase, on a loan-by-loan basis, loans written on the warehouse line of credit and any other collateral-based loans already in existence.