BANKING / FINANCE

Mariners Bank in San Clemente, which specializes in construction loans and mortgages on custom-built homes, is converting its federal bank charter into a state charter to take advantage of higher lending limits on loans secured by real estate.

The bank, which already has regulatory approval to convert, expects to complete the process by Feb. 1, said its president, Richard Korsgaard.

Under national banking regulations, Mariners can lend up to $500,000 to any single borrower. But under a state charter, the bank could lend up to $800,000 to a builder or home buyer.

For expensive homes costing $1 million or more, the bank has had to bring in other financial institutions to lend part of the amount needed. Now, Korsgaard said, Mariners can fund more loans itself--and keep all the interest generated.

“Some of the national banking laws are pretty old,” Korsgaard said. “They go back to the time when marketable stocks were considered the best security you could have.”

Mariners does not plan to take advantage of other liberal state banking rules, which allow banks to form joint ventures and buy equity stocks in corporations, he said.