A Washington State mortgage lender has withdrawn its application to form a bank after the Federal Deposit Insurance Corp. raised concerns regarding its lending concentrations.
Homestone Mortgage Inc., in Kirkland, filed an application to charter a commercial bank on June 29, 2006 and withdrew it May 17.
Its decision to withdraw the application was first reported in the Puget Sound Business Journal.
In an interview with American Banker Tuesday, Keith Tibbles, Homestone's chief executive, said the company "has a pretty significant concentration in mortgages and...a significant concentration in construction lending. The regulators have asked us to revise elements of our business plan to diversify the bank risk."
Mr. Tibbles said he believes that the agency's recommendations resulted in part from increasing regulatory scrutiny on the home mortgage market in the aftermath of the subprime meltdown. He said Homestone is working to address regulators' concerns and expects to refile the application within 30 days.
