In what could ultimately boost GreenPoint Credit Corp's asset-backed securities portfolio, the company has extended its arm further into the loan servicing industry, recently hitting the $13.3 billion, said officials at the company.
"It does create an income stream," said Richard Humphrey, senior vice president of corporate relations at GreenPoint. "And theoretically, that income stream can fund more loan originations."
"We could take it in the profit or supplement it in different ways," said John Wheeler, president and CEO of GreenPoint Credit. "We're basically an asset-backed lender, through securitizations. We hold very little."
GreenPoint has been servicing loans outside of what it originates for the past 15 years, Wheeler said. "It's something we're set up for, because we have the systems that can handle it and we have the regional offices."
Most recently, the company announced it had reached agreements with Bank of America Corp. and Deutsche Bank to service $900 million worth of loans.
"It's just an income stream for us, that is how we look at it," said Wheeler.
Though Wheeler said that GreenPoint had discussed the possibility of securitizing the streams associated with servicing other banks' loans, they have no immediate plan to do so going forward.
"We feel that it would be better for us to take it on an earned basis over the life of the loans," Wheeler said. "And we'll always have a fairly decent income stream on that."
Conseco Capital Management, formally Green Tree Acceptance, has securitized servicing revenue streams in the past, Wheeler said.
As for GreenPoint's next deal: "We aren't going to go away from what we do, which is originate, sell and service manufactured loans," said Wheeler. "This just happens to be a little icing on the cake."
"In the past we've sort of done it quarterly," Humphrey added.
GreenPoint Credit Corp is a wholly owned subsidiary of GreenPoint Financial Corp.