|
LendTrade Aids Principal Bank In Second Mortgage Correspondent Program
By James Comtois
As a means of getting help in expanding and cultivating its network of correspondents, Des Moines, Iowa-based Principal Bank has enlisted the outsourcing services of LendTrade — also from Des Moines — to help it offer a correspondent program focused exclusively on second mortgages.
Principal Bank, a member of the Principal Financial Group, purchases and services second mortgages, while LendTrade, an investment banking firm specializing in second mortgage product development and portfolio trading, is handling business development for the program.
In this partnership, LendTrade is in charge of all the sales functions, educating the correspondent about the product and collaborating with them in finding out how to make the mortgage loan work best for them. In turn, Principal does everything else, from acquiring the loan to servicing it. The bank also houses its 24/7 customer call center.
"This is the first relationship where we're helping cultivate the correspondent network," said Steven Schipper, founder and managing director of LendTrade.
Mr. Schipper formed LendTrade in 2000 to provide loan sale advisory services and investment banking services to mortgage and home equity originators. Recently, LendTrade was seeking a seconds servicer that wanted to open a correspondent network. Both Des Moines-based companies found each other and saw that this team-up was a good fit in terms of mutual goals. "Principal was looking for someone to help them with their correspondent program. We both came together…I was looking for someone like that, given their desire to open a correspond network of seconds."
"This is a straight correspondent program: we're looking for corresponds to do the underwriting," he added.
According to Barbara Mueller, vice president and chief credit and risk officer of Principal Bank, the bank is looking to develop relationships with 40 to 50 correspondents nationwide, with delegated underwriting authority.
"Right now we're working with 14 signed correspondents in nine states and have acquired loans through both bulk and flow transactions," she said in a statement, adding that Principal Bank made a conscious choice to seek out only correspondent relationships and will not be pursuing wholesale channels through mortgage brokers. "We feel that correspondents who originate through wholesale channels will appreciate the fact that Principal Bank is not competing with them for broker relationships," said Ms. Mueller.
From LendTrade’s standpoint, this also makes sense. "A lot of times the correspondents we work with operate on a wholesale basis, we're not going after broker relationship...because [correspondents] may go out to brokers, so we don't want to compete with brokers they may create a relationship with," said Mr. Schipper.
More subprime news
| 
