Barnett Banks is starting a new division to cater to buyers and builders of manufactured housing.
Barnett Credit Corp., based in Jacksonville, Fla., will offer manufactured housing financing to dealers and consumers through Barnett's bank branches, dealer showrooms, and trailer parks.
The division is hiring to build up its home state operations and plans to be nationwide by yearend.
"It's a very large market that affords a lot of opportunity," said John Brinck, the new unit's chief executive officer. Mr. Brinck joined Barnett in April to ramp up the bank's manufactured housing lending, after serving 10 years as chief financial officer at Green Tree Financial, Minneapolis.
Some observers worry that the market is not big enough for a new entrant.
"They're a little late," said Steven Eisman, analyst with Oppenheimer & Co., New York. The manufactured housing business has gotten very competitive, he said.
Lenders already involved were concerned by Barnett's entry.
"If we get any more lenders in this rowboat, I'm afraid it's going to capsize," said Kenneth Roberts, head of UC Funding, the manufactured housing division of United Cos. , Baton Rouge, La. Currently, there are 14 national manufactured housing lenders and dozens of regional ones, Mr. Roberts said. In addition, there are already too many factories and dealers in the business, he said.
But Mr. Brinck said that Barnett's new rates, terms, and programs will make the bank competitive. Barnett has offered these loans in the past through its branches, but volume was negligible in 1996-$60 million, compared with market leader Green Tree Financial Corp.'s $5 billion or Bank of America's $3 billion.
"Barnett did not have very competitive services or programs," explained Mr. Brinck. "I went through the bank and tried to take the best systems and practices from each of the different areas" and bring them to the new division.
Mr. Brinck said he has big plans for the newly organized unit and predicted that it would rival market leaders in time. "I don't see any reason why if we have competitive rates and programs, we shouldn't be competitive with everyone else in the marketplace," he said.