BANKING : Plaza Home Mortgage Plans to Cater to New Class of House Buyers

Sure, home prices are falling, and interest rates are low. But with economic times tough, plenty of families still lack the means to make a down payment.

Now that overlooked class of potential homeowners is becoming a market segment. Plaza Home Mortgage Corp., a regional lender based in Santa Ana, has announced plans to start a new unit targeting financially pinched home seekers who do not fit the underwriting guidelines for the typical mortgage buyer.

Option One Mortgage Corp., which initially will operate only in California, will offer a more flexible mortgage product to low- and moderate-income home buyers.

A company spokesman said that Option One is not ready yet to disclose information on what income level would make a family eligible for the program or its requirements for down payments.

Plaza Chairman Jack French said that creating Option One will help meet the company’s commitment, however, to make ownership possible to those now being left out. The company expects low start-up costs and is counting on “positive cash flow” within six to eight months, French said.

Meanwhile, Plaza reported robust loan origination volume of $456 million in December, a company record for that month, even though new loan applications were soft. In December, 1991, loan origination volume was $430 million.

Plaza has grown because of a spate of home mortgage refinancings. The company also opened offices in Arizona, Oregon and Florida in 1992, and it plans additional locations in the Houston, New England and the Seattle-Tacoma areas.

Plaza, which went public in October, is the holding company for Plaza Savings & Loan Assn. in Santa Ana.