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Wholesaler Goes from Startup to $1 Billion in 2 Years

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A wholesale mortgage lender that began business less than two years ago has already reached $1 billion in originations.

Coastal Banking Company Inc. reported Tuesday that its mortgage broker division generated $490 million in residential production during the first six months of this year. Purchase transactions accounted for more than half of first-half production.

Since launching in September 2007, wholesale fundings at the Beaufort, S.C.-based company have reached $1 billion.

In August 2008, Coastal said it was approved by the U.S. Department of Housing and Urban Development to originate loans insured by the Federal Housing Administration. FHA loans now account for around one-third of its business.

Coastal noted that its strategy is to originate conforming loans that are pre-sold into the secondary market, though it has acquired $38 million in loans for its own portfolio to dilute its commercial concentration.

“One of the keys to our success was the fact that we entered the wholesale mortgage industry at a time when many mortgage lenders were exiting the business, leaving a gap in service,” Charles Wagner, senior vice president of CBC National Bank’s wholesale division, explained in the statement. “In addition, we were able to create the division with nominal operational costs and free of the risk exposure that was troubling much of the industry due to past liberal lending practices.”

Also helping out was a $10 million capital injection from the Troubled Asset Relief Program in December 2008.

Coastal said it plans to expand beyond the Atlanta market to markets across Florida, Georgia and South Carolina.

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