George Bender of Commonwealth United Mortgage is one lender who doesn't quail at the prospect of an end to the refinancing boom.

That's because he has spent the last three years assiduously building up the volume of home-purchase loans at his Houston-based outfit, a unit of Lewis Ranieri's Bank United of Texas.

Mr. Bender, 54, exhorts his salespeople, some of whom have been dazzled by the easy money to be made in refinancings, that their careers are tied to the purchase side of the business.

|Where the Money Is'

"Refis will come and go, but relationships with builders and realtors will sustain you over time," he tells them. "That's where the money is."

Evidently, his team is listening. Commonwealth ranks second among thrifts in new-home lending and makes 48% of its loans to homebuyers. Other big mortgage banking companies have been making as little as 25% of their loans for purchases.

Figures like these should put the unit in good stead when interest rates rise and the two-year-long refinancing binge comes to an end.

Commonwealth, despite being a $7 billion originator, is a quiet organization that generally stays out of the limelight -- though it has caught the eye of some big-name potential suitors. (See accompanying article.)

Keeping IT Simple

Mr. Bender's office stands in stark contrast to the palaces of some other mortgage chieftains. His chair rests on a clear plastic pad that protects the carpet as he rolls between his workstation and a financial-markets data screen. The office is adorned with sports memorabilia from the University of Michigan, his alma matter.

The philosophy at Commonwealth seems simple: Keep your head down and concentrate on core business.

"We stick to our knitting," Mr. Bend said, "We have no desire to make the mortgage division into anything it isn't, like a bunch of products outside of mortgage banking."

The company's no-flash, no-frills style is not surprising, given its origins in the Texas banking crisis of the 1980s. Bank United, which was cobbled together from the remains of a number of failed thrifts, first launched into mortgages in earnest when it purchased Commonwealth from the Resolution Trust Corp. in 1990.

Mr. Bender was brought in almost immediately. "I inherited an excellent sales-driven outfit at Commonwealth, but they didn't have enough volume to be profitable," he said.

To get into the black, Commonwealth instituted a program of buying loans from brokers, putting up the money as the mortgage documents are signed.

Taking over Commonwealth Mortgage seems to have been a breeze, but the company's next acquisition raised nettlesome problems of melding conflicting sales cultures.

In July 1992, Commonwealth purchased Commonwealth Mortgage of Boston, which was on the verge of bankruptcy.

Though the purchase netted the company 13 offices in New England, the mortgage operation acquired was "focused on refinancings," said Mr. Bender.

His approach to mortgage re-education was blunt. "We had a lot of turnover," he says flatly.

Though the transition wasn't bloodless, it may have been successful in its aim; the offices now extend 52% of their mortgages to homebuyers, up from 35% before the purchase.

Mr. Bender's management style is consistent with his nose-to-the-grindstone philosophy.

"He's one of the most dogged dogged men in the business," says Scott Shay, a partner of Mr. Ranieri's at Hyperiod Partners, New York. "He's focused on what gets business."

Mr. Bender "is one of the best retail men in the business -- he's made his name there," says Tom Murray an ex-colleague from Centrust Mortgage.

Mr. Bender was president of the mortgage division at Centrust. In his 32-year career in mortgage banking, he has made stops at WestAmerica Mortgage, Unity Mortgage, and Advance Mortgage Corp., among others.

Commonwealth has also pushed into other areas of the country, including the upper Midwest and the Great Lakes region, and now has 850 sales people, up from 250 in 1990.

This adds up to about $7 billion expected in originations this year, a striking figure compared with the less than $500 million recorded in 1990.

The servicing portfolio stands at $7.2 billion, a relatively low figure for an originator of that size.

Commonwealth has "since inception" sold most of the its servicing along with the loans, says Mr. Bender. This has turned out to be a lucky play, as most servicers have been hit hard by prepayments as rates have fallen. Commonwealth has had a run-off rate in the mid-20% range, well below that of many mortgage banks.

The downside of this approach is that Commonwealth will be less buoyed by servicing income when production volumes fall.

As to the future, the company's plans are not grandiose. "We're not trying to be a Countrywide," said Mr. Bender. But the company is looking to steady -- even dogged -- expansion. "We'd like tob e in most of the major U.S. markets, but at this point its just a matter of filling in the gaps," he said.Commonwealth UnitedAt a GlanceHeadquarters HoustonServicingportfolio $2.2 billion1993originators $7 billionSales offices 92 retail, 26 correspondentTerritory Texas, California, New England, and 26 other statesParent Bank United of Texas

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