Southern Pacific Funding Corp. and Bomac Capital Mortgage Inc. are forming a strategic alliance to securitize up to $600 million of nonconforming home equity loans over the next 36 months.

Southern Pacific president and chief executive Robert W. Howard said the alliance was the first in a planned series by the Riverside, Calif., lender.

Dallas-based Bomac will provide the loans to Southern Pacific for its quarterly securitizations.

The announcement, made last week, said Southern Pacific would get a reliable long-term source of loans, while Bomac would get access to the capital markets. The loans that Bomac originates will be 100% financed by Southern Pacific.

"We are currently in discussions with a number of seasoned, small to medium-size wholesale and retail subprime mortgage bankers that would gain significant benefits from accessing Southern Pacific Funding's securitization program," Mr. Howard said.

"Specifically, we have targeted mortgage bankers with experienced and strong management teams that are doing business in geographical areas that complement our growth strategy. These relationships will produce greater securitization efficiencies."

Stan Bomar, president and chief executive of Bomac, said, "With this strategic alliance, we can focus 100% of our time on sales, marketing, and team building, (and) compete on a level playing field with other national subprime lenders."

In a separate development, Provident Savings Bank, Riverside, Calif., said it had bought Pacific Sunbelt Mortgage, an Orange County-based specialist in the builder market.

Craig Blunden, chairman and chief executive of Provident Financial Holdings, the thrift's parent, said he saw an exceptional growth opportunity in Pacific Sunbelt.

"Our strategy is to continue to increase our retail mortgage banking network throughout California," he said. "California's housing market is on the road to recovery and this acquisition will greatly enhance our success in the future."

Pacific Sunbelt has offices in Laguna Niguel, Calif., and Las Vegas. Loan fundings approached $1 billion in the latest year, an announcement said.

Pacific was formed in 1985 as a unit of Chicago's Concordia Federal Bank for Savings. It was bought in 1987 by Devin Daniels, who is selling it to Provident and will remain as president of the subsidiary.

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