Home Trust to offer traditional mortgages!

Alternative lender believes competing with banks will lower risk, allow it to pick up more business

LORI MCLEOD

00:00 EDT Wednesday, August 06, 2008

Alternative lender Home Trust Co. is launching a line of traditional mortgage products that will compete directly with those offered by the banks.

The Toronto-based lender hasn’t been pushed out of lending to riskier borrowers, a problem encountered by some of its competitors as a result of the U.S. subprime crisis.

Instead, the company, which uses a deposit-based funding model, believes the move will help fuel the growth of its core alternative-loan business and its relationships with mortgage brokers.

“What we can offer is a one-stop shop, particularly for brokers where time is of the essence for their clients,” said Gerald Soloway, chief executive officer of Home Trust’s parent, holding company Home Capital Group Inc.

To get the rest of this story from the source click here other wise here is my take on this. I want to start by saying that I love Home Trust. They have been great to my clients in the past, and I intend on doing business with them again. However that being said I don’t like the fact that they are getting into the “A” business at the expense of their core non traditional or sub prime equity lending background. Yes they are still doing some equity deals but they have pulled and or changed products in that line of business. With many players already leaving that market you would figure that they would be able to take more of the market instead of staging a retreat. Anyway since they do not sell ABCP to raise funds they should be able to come back to those products if the market demands. Only time will tell.

Cheers,

Pat