The giants of home equity and subprime lending got their new trade group off the ground with a meeting last week in New Orleans.
More than 50 people, including lenders, accountants, and stock analysts, attended the first conference of the Home Equity Lenders Leadership Organization, nicknamed Hello.
"We've seen a very exciting response," said Gary Judis, president of Aames Financial Corp., Los Angeles, and newly elected president of Hello.
The organization was created to address the legislative needs of the largest wholesalers and retailers of subprime and home equity loans.
"Other trade groups, because of their complex agendas, were not able to focus on our needs," said J. Terrell Brown, chairman and chief executive of United Companies Financial, Baton Rouge, La., and vice president of Hello. "We really need to have some input in the future."
The section 32 or high-cost-mortgage legislation passed in October was a catalyst for Hello's formation, Mr. Brown said. The law requires additional disclosure and documentation from lenders making loans with high points and fees.
"Few organizations or lenders realized that section 32 would have an impact on their business," Mr. Brown added. "But Mr. Judis and I were scared to death. Here was another piece of legislation rolled in without the industry having any input."
Within the Hello organization, lender participation is limited to those with more than $250 million annual volume, and membership fees are $25,000 a year. "We're a pretty select group," Mr. Judis said.
Although nonlending organizations are welcome to join, only lenders will be given voting rights, he added.
Signers so far include, among others, Delta Funding Corp., Woodbury, N.Y.; the Money Store Inc., Sacramento, Calif.; Prudential Securities, New York City, and Cityscape.
Hello will hold four meetings a year, in different regions of the country. The next will likely be located in the West, officers said.
Despite membership standards that seem exacting, Mr. Brown says that any outside input is welcome.
"We would welcome any folks that have an interest in Hello," Mr. Brown said. "Our purpose is to better identify things that will have an effect on this market."