Gateway Bank: From Traditional Thrift to Warehouse Expert

Article excerpt

When Poppi Metaxas arrived at San Francisco-based Gateway Bank in 1995, as chief lending officer, she found the federal savings bank was running with the pack, trying to be all things to all people. "We'd chase commercial loans with all the other banks," she says. "In the end, though, if Bank of America wanted the credit, they would undercut our price."

Below-average financial results reflected this diffused focus. Management decided something had to change.

"We looked long and hard at what we did," says Metaxas, now president and CEO, "and asked, 'what is our specialty? What do we know better than others?' We concluded that we had some outstanding mortgage professionals on staff."

Two years later, Gateway developed a very well-defined niche: warehouse lending for mortgage brokers along with residential mortgage originations. The warehouse program now operates everywhere in the U.S. except Alaska and Puerto Rico. It operates under the trademarked name, Quick Sale, and is a separate division of the $326 million-asset bank.

Under the Quick Sale program, Gateway acquires high-grade single-family loans from brokers. (Loan-to-values typically are about 60%.) These loans are pre-sold to whomever the broker's takeout investor may be, and are bought at the closing table. Gateway "warehouses" the loans for 3-45 days generally before they are sold to Morgan Stanley, JPMorgan Chase, Bear Stearns, or one of the government-sponsored housing entities. …