Willow Financial Bank, seeking to expand its residential mortgage business, said today that it hired two executives from a subprime lender that filed for bankruptcy this month.
Willow Financial, of Wayne, said John J. Held, who had been a division director of Home 123 Mortgage, will be president of mortgage banking, and Thomas S. Forker, who had been regional director for Home 123 in this region, will be senior vice president of mortgage sales.
Joseph T. Crowley, Willow Financial's chief financial officer, said that Held and Forker went to work at Home 123 from Citizens Bank to branch out into conventional mortgages, but that their effort was swamped by the troubles of Home 123's parent, New Century Financial Corp.
"Their background is in conventional, conforming mortgages," Crowley said, repeatedly saying Willow Financial would not be going into subprime lending - that is, lending to people with poor credit.
New Century, once the nation's second-largest subprime lender, was ordered last month by many states, including Pennsylvania and New Jersey, to stop making new loans. The company filed for bankruptcy protection April 2.
The expansion of home mortgage lending at Willow Financial started in February when it hired Michael Poga, who had been a loan officer at Citizens. He contacted Crowley after Citizens centralized mortgage processing in Rhode Island. "In the first two months on board, he did as much volume as some of our existing representatives . . . did in 12 months," Crowley said.
Poga started a chain of hires that led to today's announcement by the bank, which has $1.5 billion in assets and 29 branches in Southeastern Pennsylvania.
Until now, 18-month-old Willow Financial had emphasized commercial lending over residential mortgage lending. The shift is intended to take advantage of bank branches in growing markets, where relationships with real estate agents are crucial, Crowley said.
"We felt that we weren't fully realizing the potential to get fee income from doing residential loans," he said.