Greenpoint Financial Corp., solidifying plans for a national drive to originate no-documentation mortgages, has purchased a servicing center to handle additional volume.
The New York bank agreed to pay $4 million for the building and Alltel- based system that Citizens Financial Group used until exiting the mortgage servicing business earlier this year.
Greenpoint will initially consolidate at the Columbus, Ga., site $6.7 billion of servicing that is now done at an operations center in New York and through a contract with Wendover Funding Inc.
The 35,000-square-foot Georgia facility will give Greenpoint "a better platform for the growth we're expecting," said senior vice president Rich Humphrey.
Greenpoint is expanding into metropolitan areas like Atlanta, Boston, and Seattle in hopes of replicating a "no doc" lending strategy that has gone well in New York. The company has already experienced initial success on the national front through the July 1995 acquisition of a wholesale lending unit from Barclays Bank, Mr. Humphrey said.
Under Greenpoint's no-doc and low-doc programs, the bank waives requirements for income and asset verification in exchange for a heftier down payment-usually at least 25%.
The approach, which relies heavily on property appraisals and credit reports, produced $2.4 billion of loans for Greenpoint last year.
In shifting servicing to Georgia, Greenpoint Mortgage will lay off "most of" the 150 employees that now handle servicing in Lake Success, N.Y., Mr. Humphrey said.
Greenpoint Mortgage will also bring to Georgia about $2 billion of loans sub-serviced through Wendover, which is currently for sale. The loss of business will likely impact the price Wendover will now fetch, one investment banker said.
Greenpoint helped develop no-doc mortgage lending a decade ago and has a reputation for running a prudent operation. The lending strategy is a tricky one because borrowers supply less information than they do for conventional loans.
As Greenpoint expands, "vigorous oversight and hiring the right talent" will be crucial to the program's success, said Tom Lamalfa, a partner with Wholesale Access, Columbia, Md.
