Magazine article American Banker

First Union Poised to Storm Home Equity Securitizing

Magazine article American Banker

First Union Poised to Storm Home Equity Securitizing

Article excerpt

First Union Corp.'s pending acquisition of Money Store Inc. could turn the Charlotte, N.C., banking company into a home equity securitization powerhouse.

The company announced this year that it would pay more than $2 billion for Union, N.J.-based Money Store, the largest issuer of home equity-backed securities in 1997.

First Union plans to handle through its capital markets group all securitizations for home equity, student, and business loans originated by Money Store, said James Maynor, chief executive of First Union Mortgage and former head of the company's home equity division.

The acquisition would bring the bank a bigger than $4 billion home equity origination pipeline, in addition to several billion dollars' worth of other loans. An estimated $62 billion of home equity loans and lines were securitized in 1997, according to Goldman, Sachs & Co.

First Union plans on playing a larger, more constant role in the securitization market in 1998, Mr. Maynor said, with Money Store's originations playing a large part.

Until now, First Union and most other big banks have been marginally involved in the home equity securitization market, said Anthony Thompson, director of asset-backed research at Goldman Sachs.

Banks have been trying to streamline, consolidate, and centralize, Mr. Thompson said, which contrasts with the fragmented, non standardized nature of the home equity securities market.

He said he expects this market to become more uniform in the next three to five years, in part because banks will take a more active role. …

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