By Andree Brooks
N.Y. Times News Service
Shrouded in a patrician image of mahogany, Persian rugs and
hushed voices, private banking is a service that most people
think is strictly for old-money families or people of exalted net
True. But it's changing. Private banking as a source of
mortgage money for a personal residence _ and certainly for
investment property _ is increasingly being offered to a broader
range of people.
This results in part from a more aggressive chase for affluent
"In the last few years we've seen much greater competition for
the jumbo and super-jumbo mortgage loans," said Harry McCormick,
director of mortgage financing for the private division of the
Bank of Boston. "And the ability to write these loans quickly and
easily is more likely in a private banking environment."
A jumbo loan starts at $203,000, a super-jumbo at $500,000.
Traditionally, a private bank or the private banking section
of a major lending institution offers a range of customized
services in a more elegant setting to people of higher net worth,
say $500,000 and up. These services may include more flexible
terms, a more sophisticated response to someone's financial
circumstances, greater discretion by the personal banker
concerning the level of credit and an ability to respond more
A mortgage obtained through the private banking division of a
major lending institution can be more convenient and less costly.
For example, Margaret S. Scott, president of Mortgage Advisory
Services of Manhattan, said she recently got a variable rate
mortgage for a client at 5 percent compared with 6 percent on a
Clients are also coddled. They may be offered a house call,
tickets to a Broadway opening or reservations at an exclusive
As its name implies, private banking is still a very personal
arrangement and many private bankers will see only people who are
referred, so some prior networking may be needed. However, many
institutions permit referrals to come from the real estate broker
or even a mortgage broker. Ms. Scott said she regularly contacted
private bankers whenever it seemed appropriate.
Even this may not even be necessary. J.P Morgan, U.S. Trust
and Chemical Bank of New York are among a growing number of
lenders offering private banking services that openly solicit
inquiries through carefully placed advertisements.
Brian Lincoln, a vice president at Chemical, said that initial
encounters normally took place by phone. The caller is given
details about the criteria that apply. At Chemical eligibility
remains daunting: a net worth of $1.5 million and an income in
excess of $250,000.
Criteria differ widely from lender to lender. Scott said she
recently used private banking for a man in his late 20s buying a
first home on the Upper West Side of Manhattan. He had an income
of $100,000 a year and a net worth of $450,000 _ not small change
but not millionaire status either.
At the Bank of Boston, a six-figure income is not needed,
though a net worth of at least $1 million is. The bank also has
no minimum size for a private loan. McCormick said this was
because many clients were interested in buying modest houses
despite their wealth or wanted to use private banking to finance
a small vacation home. …