A newcomer to home equity lending, Milwaukee-based Guaranty Bank, has launched an aggressive expansion to make it a nationwide player in that line of business.
The cub unit, Guaranty Home Equity, will double its operation's size by the end of September, said Joseph J. Mundwiler, president.
Several other lenders have been rapidly expanding their home equity lending divisions since the mortgage refinance boom ended last year.
Guaranty Bank will nearly double its home equity staff to 25, he said. And it will open operations in a 11 more states. Movements into five additional states - Washington, Oregon, California, Nevada, and New Mexico - will come within the next 30 days, he said.
The bank created Guaranty Home Equity last June. By yearend, the subsidiary originated $25 million of home equity lines of credit.
So far, Guaranty has done most of its home equity loan originations through branch loan officers. But Mr. Mundwiler said if a branch precipitates $1 million or more a month of home equity loans, the bank will hire staffers dedicated solely to that line of business. Such an employee was hired recently in Guaranty's Atlanta branch.
Guaranty's wholesale operation is blooming most brightly, Mr. Mundwiler said.
Because mortgage brokers are such powerful wholesale loan originators, Guaranty, like other lenders, has begun tailoring loan products to brokers' wishes, he said.
The latest, the concurrent-close loan, was introduced at the end of last quarter. It allows brokers to close home equity lines of credit at nearly the same time they close first liens.
He said 30% to 40% of first mortgage borrowers have also taken a concurrent-close home equity loans.
Prudential Bank has had marked success at selling home equity loans when borrowers close on their first mortgages.
Mr. Mundwiler hopes Guaranty will be able to originate $15 million a month of wholesale home equity loans - moderate by industry standards.