The former chief executive of Chemical Residential Mortgage Corp. has returned to his entrepreneurial roots.

David Frank has started a small mortgage lending company, America's Mortgage Source, in New Jersey.

Mr. Frank resigned as chief executive of Chemical's mortgage unit in July 1995. He had been a top executive at Margaretten Financial Corp., a freewheeling mortgage bank that Chemical acquired in 1994.

Industry sources said a culture clash between the entrepreneurial mortgage executives and the more staid commercial bankers prompted Mr. Frank's departure.

Once he decided to return to mortgage lending, Mr. Frank said, he explored buying an existing mortgage company. But when a deal to buy Patriot Mortgage, St. Louis, Mo., fell apart during negotiations earlier this year, he decided to start a company from scratch.

"I was not excited about joining another large company," Mr. Frank said of his decision to start his own company, "but (I) became excited about building another company. I've always liked the opportunities that represented." He said that although he liked working at a small to medium- size company, he wound up at one of the largest mortgage lenders through mergers and acquisitions.

Mr. Frank was one of three mortgage executives who left high-ranking positions last summer. Mark Korell resigned as chief executive of GMAC Mortgage Co. in May 1995. He is now a group president at Norwest Mortgage Co., Des Moines, Iowa. Mr. Frank was next, followed by Fred B. Koons, who left Chase Manhattan Mortgage, where he was chairman and chief executive. Mr. Koons is reportedly fishing off Tampa.

Five years ago, Mr. Frank says, he would not have pictured himself building a company from the ground up. But he decided recently that an entrepreneurial opportunity was the next logical step for him.

"I thought this is what the market is ready for," Mr. Frank said of his startup company.

"When other (job opportunities) came my way, I was lukewarm toward them," he said.

America's Mortgage Source originates government, conventional, and a smattering of subprime loans in New Jersey, Pennsylvania, and Delaware. It has a warehouse line of credit to originate through retail channels. It's also a correspondent, selling loans to larger lenders.

The company will attract customers through direct mail and telemarketing efforts, both of which began this month, Mr. Frank said.

The company took its first application in April. Mr. Frank and his 22 employees had a grand-opening celebration last week in the office space they moved into just last month.

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