Wholesale 50/30 Program

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MORTGAGE EXPERT
11 · 13 · 06

A California-based wholesale lender has launched an adjustable rate mortgage with a 50-year amortization.

The 50/30 product — the remaining balance is due in 30 years — is being offered by ResMAE Mortgage Corp., of Brea.

The first 50-year product, also a 50/30 loan, was introduced last March by another California lender, Statewide Bancorp of Rancho Cucamonga.

ResMAE’s loan, according to Richard Theiss, vice president of marketing, is being offered as either a fixed-rate loan or an adjustable rate loan with a choice of two options, with the loan rate fixed for either the first two or the first three years, after which the rate is adjusted every six months.

Rate changes are then capped at one percentage point ever six months and six percentage points over the life of the loan. Like other 50-year products out in the market, it is not available as an interest-only loan.

Paul Abbamonto, ResMAE’s chief of production, told MortgageDaily.com the product “is a good alternative as it provides a reasonable monthly payment, a chance to build some equity, and, when market conditions are most favorable, they can refinance before the due date.”

ResMAE, a wholesale specialty residential mortgage lender and servicer that originates loans through a network of independent mortgage brokers, already has a 40/30 loan, as do most other lenders who have introduced a 50/30 product. It has funded over $15.8 billion in loans since it was founded in January 2003.

The 50/30 program is mostly offered by smaller or regional mortgage companies. For example, Chase Home Finance, First Horizon and Option One all told MortgageDaily.com that they do not offer the product.

Those that did, in addition to Statewide and ResMAE — which is reportedly licensed or qualified to conduct business in all 50 states, include National City Bank of Indiana’s First Franklin, which operates in 20 states, Chateau Mortgage of Louisiana Inc. and Wholesale Lending Online, which operates in 21 states. All their 50/30 loans have balloon payments due at year 30.

The product also is listed as available at the online site, Loan Choice Direct, one of three Web sites operated by McLean, Va.-based First Guaranty Mortgage Corp., but it could not be learned if First Guaranty itself offered the loan.

Mortgage Expert

Mortgage Daily Staff

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