CWM Mortgage Holdings Inc. is entering the market for nonconforming residential mortgages as a wholesale buyer.

Greg Bowcott was named chief executive officer of the new wholesale unit, Independent National Finance Corp. Previously, Mr. Bowcott had been a senior manager at both Advanta Mortgage Corp. USA and Security Pacific Financial Services.

In recent months, lenders have been on a binge of buying "B" and "C" loans, which, with their higher interest rates, offer a higher rate of return than is available on conforming loans, or "A" paper.

"This industry currently lacks a low-cost lender who can also promise a higher grade of loan," Mr. Bowcott said. "Because our costs will be lower and our standards more stringent, we believe INFC will attract higher- quality originators at a lower risk."

Separately, CWM announced a 75% increase in first-quarter earnings, to $10.2 million, or 28 cents a share.

CWM's conduit program bought $1.3 billion of jumbo and other nonconforming loans during the first quarter. The purchases gave the wholesale unit a 21.5% market share, making it the largest issuer of private mortgage-backed securities last quarter.

INFC's servicing portfolio grew by $840 million during the quarter, to $7.7 billion. At March 31, the company had extended 105 warehouse lines of credit to mortgage originators with credit limits totaling $341 million, of which $64 million was outstanding.

The company closed $42 million of construction lending commitments during the first quarter, of which $19 million was outstanding at March 31.

"While mortgage loan purchase volumes in our conduit remain flat as a result of reduced demand for mortgage loans and a general trend toward consolidation in the industry, the company continues to pursue complementary business activities and to build its investment portfolio," said Michael W. Perry, chief operating officer of the parent company.

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