Some Firms Worth Keeping an Eye On.

Every year this newspaper and its affiliate, National Mortgage News, release a special report on 20 (mostly) private mortgage banking firms that are worth keeping an eye. The lenders aren't necessarily the Countrywides of tomorrow (then, again you never know) but are noteworthy because they are mining a particular niche, are fast growers, or have a dominance in one particular channel, product, or geographic region.

Some of these firms very well could be out of business in a few years - probably through M&A. Others might be thriving. Time will tell. In the end it's all about building a better mousetrap. Right?

Again, most of these firms are privately held. Some are subsidiaries of publicly traded, larger companies (like BNC Mortgage). In the space below I'm providing a teaser on three of the 20 firms. Happy reading and let me know what you think.

BNC Mortgage: In October 2005 (and after months of speculation in the industry), subprime wholesale giants BNC Mortgage and Finance America finally merged, leaving BNC as the surviving brand. The two were affiliates, operating in the same niche, sharing a well-known parent, investment banker Lehman Brothers. The reason the BNC brand survived and FA disappeared speaks volumes about the reputation of BNC's president and CEO Kelly Monahan. As for FA, well, that's a different story, one that Lehman would not discuss with the business press. Suffice to say that things were not going well at FA. Back in May 2005, Lehman fired several top executives at FA, including CEO Art Rice and chief operating officer Graham Fleming. The merger of the two affiliates created the nation's ninth largest subprime originator overall. Based in Irvine, Calif., the company, which employs about 2,500, now has the ability to fund $2.5 billion a month but would like to grow that capacity. Even though BNC reduced its overall workforce when it absorbed the beleaguered FA, the company is committed to growth and would like to add more sales people and increase its market penetration.

CMG Mortgage: Last year while most lenders (it seems) were concentrating on funding low-payment, interest-only loans CMG Mortgage Services of California rolled out a new product that helps consumers pay off their mortgage early. The loan, which is called Home Ownership Accelerator, is "A" paper in nature and appears to be catching on. CMG president Chris George describes the loan as one of the first ...