Florida entrepreneurs William M. Wetherall and Ramsay Momneh moved this week to transform their Tampa-based home equity lender into a national business, forming a new holding company that can raise acquisition capital.

With a $500,000 initial public offering, Mr. Wetherall and Mr. Mumneh created CMAL Financial Corp. as a holding company for Continental Mortgage Associates, which Mr. Momneh, an investment banker, bought last year.

The company is considering buying auto financiers, insurance companies, and mortgage servicing companies that would complement its existing home equity business, Mr. Wetherall said.

Mr. Wetherall joined the company last fall from Carpet Shops USA, in Orlando, where he was chief financial officer. Mr. Wetherall is president and Mr. Momneh chairman of CMAL Financial.

The two executives have been building the 15-year-old mortgage company's business by opening offices and forging relationships with correspondent lenders, offering a product menu that relies heavily on home equity loans.

CMAL is riding a wave of popularity for home equity loans, versatile products used for everything from debt consolidation to putting children through school. The growth in the business is partially fueled by investor interest in securities backed by the loans.

Investor demand is expected to allow the market to remain liquid and lenders to replenish capital through securitization. Industrywide, home equity loan securitizations jumped to $19.4 billion during the first five months of this year, from $14.5 billion the same period in 1996, according to Salomon Brothers.

With the boost, home equity volume surpassed credit card receivables- which had $14.6 billion of issuance through May.

Home equity loans will account for about 65% of the $500 million that CMAL expects to lend this year, Mr. Wetherall said, noting home equity represented a negligible portion of the company's business just a few years ago.

Indeed, originations this year will be up smartly from the $106 million in 1996, before CMAL opened a California office and signed up 250 correspondent lenders in different parts of the country.

Volume will continue to grow, because CMAL will continue seizing opportunities, Mr. Wetherall said. "We're aggressively going out and promoting our products and services and looking for niches that aren't being explored."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.