Magazine article American Banker

Power Express' Calif. Push Adds Third Acquisition

Magazine article American Banker

Power Express' Calif. Push Adds Third Acquisition

Article excerpt

A New York lender is sweeping into one of the nation's most crowded mortgage markets in hopes of filling a niche for jumbo and superjumbo loans in California.

Wall Street Mortgage Ltd., which does business as Power Express Mortgage Bankers, said Tuesday that it had bought Valley Mortgage Brokers of Pasadena - the third small lender it has acquired in California in the past year. It did not say what it paid.

"The market opportunity for jumbos - the way we lend - is tremendous because there doesn't seem to be local competition," Keith Kantrowitz, Power Express' president, said in an interview Tuesday.

That "way," he said, includes funding loans for foreign nationals in high-cost areas like Beverly Hills or a $50 million loan for a prominent Manhattan homebuyer Mr. Kantrowitz would not identify.

Last year the Lake Success company funded $2 billion of jumbo loans, increasing its funding of $1 million-plus loans by 166%. Home price appreciation in areas like Beverly Hills and the outer boroughs of New York fueled the increased volume in the face of a national housing downturn, Power Express said.

Power Express' production of loans of $2.5 million to $5 million more than doubled last year. Loans in that range account for about two-thirds of the ones over $1 million it has made since last year.

Clay Simmons, the chief financial officer of Thornburg Mortgage Inc. in Santa Fe, N.M., another jumbo lender, agreed that the California market is ripe for growth and new entrants.

"California housing prices are expensive, even though there may be some softness in the marketplace," he said. "That is very well suited to our prime borrower base." California accounts for 35% of Thornburg's portfolio - a larger portion than any other state. In the first quarter the average size of loans originated by Thornburg increased by 73% from a year earlier, to $1. …

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