The newly expanded Chemical Banking Corp. is intent on emerging as one of the nation's premier retail lenders, and mortgages are a big part of its efforts.
The company plans to originate $10.5 billion in home loans this year, up 50% from the $7 billion reported last year by Chemical and its merger partner, Manufacturers Hanover Corp., company officials said.
That's well ahead of the 20% to 33% growth expected for originations industrywide.
In the latest sign of its ambitions, Chemical hired mortgage superstar Luke Hayden to direct sales of loans to the secondary market.
Hayden, who held a similar post at Security Pacific Corp., turned down a key mortgage post at BankAmerica in April, just before it merged with Security Pacific.
The hiring of Hayden "demonstrates that the mortgage business is a key growth business for the bank," said Thomas Jacob, Chemical Bank's executive vice president for national consumer lending. "We really needed someone of Luke's stature and track record to handle the secondary market function for us."
The secondary market post is important since Chemical sells most of its new mortgages and earns fees from servicing them.
Until now, Chemical's capital markets group coordinated mortgage sales. The creation of a secondary market unit within the consumer lending area emphasizes the rapid growth in the bank's mortgage lending. Hayden, 35, said it is the opportunity to build that unit that drew him to Chemical.
Hayden will also manage the mortgages kept on the bank's books; the portfolio stands at about $6 billion.
Hayden is Chemical's third senior vice president with mortgage expertise. The other two--Chemical veterans Stephen Rotella and Kenneth Wohst--handle servicing and production, respectively. All report to Jacob.
Chemical ranked No. 11 among nationwide mortgage originators in 1991 and is likely to crack the top 10 this year, said Mark Kamm, executive vice president of SMR Research.
Chemical's historical strength in mortgages has been wholesale originations--purchases of new loans from other lenders. But in the past two years, it has been cranking up retail production, an effort that has been heightened by the merger. Chemical and Hanover combined have the biggest branch system in metropolitan New York.
Jacob said retail should account for about 50% of Chemical's total originations this year.