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Article: Banks make subprime home loan operations separate business units.(sub-prime rate mortgage lending)(Brief Article)
- Article from:
- American Banker
- Article date:
- September 27, 1995
- Author:
CopyrightCOPYRIGHT 1995 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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As banks push into subprime mortgage lending, they are opting to run the programs as separate business units.
Barnett Banks Inc. and NationsBank Corp. both recently bought and built up separate operations to handle originations and servicing of loans to borrowers with blemished credit records.
Banks are allowing these operations to have their own identities as a way of preventing defections of seasoned staff. Additionally, in the case of subprime lenders, it isn't practical to mesh these units with mainstream mortgage programs because they deal with different kinds of borrowers, observers said.
Borrowers who receive subprime, or so-called B and C loans, ...