Magazine article American Banker

Lenders Benefit from Incentives to Open Offices

Magazine article American Banker

Lenders Benefit from Incentives to Open Offices

Article excerpt

It made sense for First Union Mortgage Corp. to keep a servicing center in Wilmington, N.C.

Employees were settled there. And the Wilmington office had become the focus of First Union's vast telemarketing operations.

But the City of Columbia and the State of South Carolina gave First Union such a sweet deal it had to move south.

"Opening up new offices is a pretty costly matter," said Richard P. White, a First Union vice president. Incentives "certainly help."

While mortgage companies do not often shuttle major operations from state to state, many open several retail offices at a time. Some are calling on local municipalities and state governments to ease costs with incentives as South Carolina and Columbia did for First Union.

It would seem other municipalities will acquiesce. Competition among municipalities for corporate business is fierce, said Stan F. Soja, business development manager for the city of Wilmington, Del.

"We go after anything that we know is out there," Mr. Soja said.

First Union's telemarketing unit was not small. It originated slightly less than $ 500 million last year.

As part of its plan to stem portfolio runoff with telemarketing originations, the lender needed the space to add about 130 new employees to the 150 already working in Wilmington.

An Array of Incentives

Wilmington's offer to stay paled compared with South Carolina's and Columbia's incentives to move south.

South Carolina paid for ads encouraging job applicants on local TV, radio and in newspapers. …

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