Contimortgage Corp., a fast-growing home equity lender, has named a new president and chief operating officer.
Robert Major took over the reins at the Horsham, Pa., mortgage bank on July 19. He succeeded Mitchell L. Heffernan, a founder of the company, whose resignation from Contimortgage goes into effect Sept. 1.
Most recently, Mr. Major was president and chief operating officer of NationsCredit Corp., an Allentown, Pa., subsidiary of NationsBank.
The departure of Mr. Heffernan is a milestone for Contimortgage. He is the last of the company's founders to leave the subsidiary of Continental Grain Co., which is wholly owned by the Fribourg family of New York City.
Mr. Heffernan, 37 years old, started the company in 1987 with Ronald L. Williams and MerchantsBank of Boston, with $750,000. Continental Grain bought 80% of the lender in 1990.
Mr. Williams also left Contimortgage in 1994. He sold his 10% stake in Contimortgage to Continental Grain this year, as did Mr. Heffernan.
No price was announced, but some industry observers speculated that Mr. Heffernan and Mr. Williams each reaped perhaps $10 million from the sale.
Mr. Heffernan has said he plans to start a finance company in Connecticut.
Contimortgage has made its mark on the home equity market by being conservative despite the risky business it is in: making loans to borrowers with damaged credit histories. It usually makes such loans on only 62% to 72% of a property's value.
As a result, not more than three-tenths of 1% of its loans go delinquent, Mr. Heffernan said.
Conti has grown rapidly since its birth. Most of its success has come through home equity loan securitization, which has blossomed since 1990. Securitization has allowed for more aggressive home equity lending.
Contimortgage originated $1.3 billion of home loans last year. The company said in a press release that it expects to originate $1.8 billion this year. It services $2.5 billion of home equity loans.
Mr. Heffernan said the lender has exceeded all expectations presented its original business plan.