Green Tree Sprouts to $2 Billion In Originations; Profit Up 22%

Green Tree Financial Corp., the St. Paul-based lender best known for its dominance in financing manufactured housing, set several in-house records in the second quarter.

For the first time it originated more than $2 billion in retail loans in one quarter and racked up $2.08 billion in securitizations. The loan figure is up 43% from a year before.

Earnings rose 22%, to $75.4 million. That too was a record, as were per- share earnings, up 23% at 54 cents.

Manufactured-housing lending, the core of Green Tree's loan volume, increased 21%, to $1.35 billion. Consumer finance loans jumped 175%, to $280 million, and home-improvement loan volume 12%, to $206 million.

The company increased loan volume despite rising interest rates because of the value-added services it offers, said chief executive Laurence Coss.

And its new home equity division, started in February, is off to a strong start. Green Tree originated $149 million in home equity loans in the second quarter through retail and wholesale channels.

"We have to be proactive and targeted" to be successful, said Bruce Crittenden, senior vice president and head of the home equity division. Green Tree wooed him from Household Financial in June 1995.

Each of the company's five regional home equity offices - in Tampa; Greensboro, N.C.; Pavonia, Mich.; Virginia Beach; and St. Louis - will eventually have several satellite offices for retail operations, Mr. Crittenden said.

He added that the Green Tree's home equity operations would in time extend coast-to-coast. He is aiming to originate $500 million of home equity loans this year.

Despite increasing competition in the home equity market, there is still plenty of room for Green Tree, Mr. Crittenden said. "It's a huge, fragmented industry. Total available home equity is said to be $3 trillion, and the industry has only tapped into $3.3 billion of that."

Green Tree's experience in the manufactured housing arena has helped drive its wholesale home equity business, he said. "We've been able to cultivate relationships with companies we've known for years."

Manufactured housing and home equity lending are a "natural fit," Mr. Crittenden noted. "Manufactured housing is a dealer-driven business, and that's akin to wholesale home equity, because it relies on relationships."

In general, lenders trying to jump from manufactured-home lending to home equity lending or vice versa have had trouble making the transition.

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