Magazine article American Banker

Fleet Puts Its Money on Conventional Mortgages

Magazine article American Banker

Fleet Puts Its Money on Conventional Mortgages

Article excerpt

Fleet Mortgage Group, the fifth-largest originator of home loans, is hoping to prove that lenders can make money simply by originating conventional mortgages.

More and more mortgage companies are entering the subprime mortgage market as a means to boost profits. Countrywide Credit Industries, the nation's No. 2 mortgage originator, announced in its latest earnings report that subprime and home equity lending totaled 7% of origination volume but accounted for more than a third of the company's loan production income.

But Fleet Mortgage's parent, Fleet Financial Group, sold off its subprime division, Option One Mortgage, to H&R Block earlier this year.

Fleet Mortgage's new executive vice president for loan production, Thomas C. Palmer, said the Columbia, S.C., lender has no plans to reenter the risky business of originating loans to the credit impaired.

"From my standpoint, there is an opportunity to improve the bottom line with the existing business," Mr. Palmer said.

Mr. Palmer joined the company earlier this month and has spent the last few weeks visiting Fleet's wholesale, correspondent, and telemarketing operations.

Fleet's mortgage-related technology has lagged that of other large mortgage lenders. This, analysts say, has been a reason why returns at its mortgage division have not been as high as the parent company would like.

Mr. Palmer said cutting costs in all of Fleet's delivery channels would be the key to improving profitability on the production side.

"One common theme will be using automation to make faster decisions and reduce costs," Mr. …

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