A small thrift in New Jersey is taking the unusual step of offering warehouse loans to independent mortgage bankers.

Large commercial banks and mortgage companies dominate the business, which supplies interim funding while loans await sale into the secondary market.

Smaller institutions, like thrifts, usually make such loans to accommodate customers, not as a separate business line.

But executives at Statewide Savings Bank, with $675 million of assets, said that the times warrant their institution's ambitious step.

"We can do this profitably because there is demand, especially on the smaller end," said Walter Hrycyna, (pronounced Ra-CEEN-a), president of the new warehouse unit.

Mortgages typically go from closing into the secondary market within 15 to 90 days, so the warehouse lines will provide "a good return for short- term assets," Mr. Hrycyna said. He said he expects the operation to contribute several million dollars a year to the Jersey City thrift's bottom line.

Mr. Hrycyna joined Statewide this summer from Summit Bancorp, where he was a senior vice president in the mortgage group. His right-hand man in the new effort is Thomas Berger, who spent the last two years with the warehouse lending arm of giant GE Capital Mortgage Services.

Statewide is among thrifts that, in recent years, have found themselves with an abundance of capital after initial public offerings. The warehouse business could put some of this money to work.

By acting as a warehouse lender, Statewide can hedge against the booming prepayments affecting its own investment and mortgage portfolios, Mr. Hrycyna said.

Still, said mortgage analysts, it may be hard for the new unit to compete against established, highly capitalized rivals. Mortgage bankers usually want to have gone through a cycle with their warehouse lender to know they will have support during good times and bad, analysts said.

Statewide understands this concern and will take a very focused, consistent approach, Mr. Hrycyna said.

The company will target small and midsize mortgage bankers, which Mr. Hrycyna says are often overlooked by larger lenders.

He is eyeing independent brokers who want to become full-fledged mortgage bankers as a way to avoid conflicts with the Real Estate Settlement Procedures Act and problems being paid premiums on loans originated above the market rate.

The company will supply lines in the $1 million to $5 million range to mortgage brokers and others in New Jersey and neighboring states, said Mr. Berger, Mr. Hrycyna's top aide.

Ultimately, Mr. Berger said, the business will operate from Boston to Washington.

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