NEW YORK -- The Dime Savings Bank of New York is taking a long at the big picture nowadays when it comes to mortgage lending. And at the venerable New York-based institution, big means "jumbo."
Taking advantage of a favorable interest rate environment, Dime is putting much of its marketing muscle into originating very large home loans - those above $250,000 - on the simple premise that it takes just as much time, effort, and expense to go after a $400,000 loan as it does a $100,000 loan.
But Dime says its new Private Mortgage Banking program is not all about generating large originations.
|Speedy Commitment'
"It's predicated on service, speedy commitment, and fast closings," said David Totaro, senior vice president and head of mortgage marketing. "The program is marketing focused, not rate focused."
The impact of the bank's newest focus - as well as other expanded product sufferings - is shown by its originations performance so far this year.
Average loan size soared to $163,000 as of the end of September, from $110,000 in the first quarter. The typical jumbo loan was $400,000. Jumbos are loans above the maximum of $203,150 imposed by Fannie Mae and Freddie Mac.
Originations are running at an annual rate of about $1 billion, up from a pace of about $300 million in the first quarter.
A Third Are Jumbos
Mr. Totaro was quick to point out that about two out of three loans are still non-jumbo. He said that interest rates on jumbos at Dime run about a quarter point higher than on smaller loans.
"You have to have a fairly competitive rate, but consumers are looking for service, speedy commitment, fast closings. And through our mortgage specialist we are providing that."
"We have a major thrust in the affordable-housing area as well as a major thrust in the jumbo market," said Jenne K. Britell, chief lending officer and general manager of mortgage banking at Dime.
She said that in the past one did not see much differentiation in Dime's products and mortgage-market activities.
"If we want to distinguish ourselves in this competitive market, we've got to bring to bear the strength that the Dime has always had as a big-mortgage provider and make our offerings match up against different market segments."
New Maturities
Mr. Totaro said that Dime was adding 10-year fixed and 40-year fixed jumbo mortgages to its existing 15-year and 30-year loans. "There's been a stronger interest in one-year adjustables across the board," he noted.
"We've also recently seen a stronger interest in the one-year adjustable because those rates are very, very low," Mr. Totaro said. "They are under 4%, and even with the 2% cap each year people are still looking at it and saying, over the next several years I may move."
He noted that in this particular mortgage market, the average loan price is considerably higher than in the past.
"Mortgages are among the few remaining tax deductions," Mr. Totaro said. "Interest levels are at the lowest they have been in more than 25 years, and therefore there's an opportunity to lock in at very low rates."
"Every loan is tailored to the customer's specific needs," Mr. Totaro said. "One of our ads, in fact, says, if you're going to get a $250,000 loan, you should be able to write the fine print, not just read it." Dime representatives will go to a borrower's home or workplace to take an application.
"As we move more into the market, we're taking more share from other lenders, so we are getting more of a variety of loans even on the conforming side," Ms. Britell said.
New York and California have been the largest producers of jumbos because of the higher housing costs on the East and West coasts.
Mr. Wiggins is a freelance writer based in New Jersey.
Mr. Wiggins is a freelance writer based in New Jersey.
