With other subprime lenders fighting for survival, WMC Mortgage Corp. has resumed flashing its money around.
The Woodland Hills, Calif., company is trying to boost loan volume by offering top-performing employees the opportunity to tool around in new Porsches.
It thus becomes one of the first subprime lenders to return to the ostentatious marketing efforts that were the trademark of the industry before a slump last fall.
The company's new "Race to the Top" sales program will give winning sales and operations employees use of one of seven new Porsche Boxsters each month. The convertibles go for a base price of $41,000.
WMC Mortgage is one of the few surviving subprime lenders. A capital drought caused many to scale down operations and in some cases declare bankruptcy.
Wilshire Financial Corp., United Companies Financial Corp., Southern Pacific Funding Corp., Mego Mortgage Corp., and CityScape Financial Corp.- and over the weekend, some subsidiaries of FirstPlus Financial - are among the casualties of the sector.
It was WMC's good fortune to have a capital-rich parent, Leon Black's Apollo Advisors, and a whole-loan sales strategy that shielded it from the liquidity crunch that hurt others last year.
"The impact from the turmoil in the subprime market in 1998 led many subprime originators to cut back on sales and employee incentives," said Scott McAfee, president and chief executive of WMC, in a statement.
"WMC is offering this new program, recognizing that our premier assets are our employees who have been instrumental to our success," Mr. McAfee said.
Morale is already improving, said a prepared statement from Steve Wright, executive vice president at WMC.
"The new Boxsters have been well received-fueling a growing enthusiasm at WMC."
The company reported that it originated $4.2 billion of loans last year, and has $865 million of loans in its pipeline.