Hudson City Bancorp—one of the largest buyers of correspondent loans in the New York/New Jersey area—plans to sell more of its production into the secondary market going forward.
The Paramus, N.J.-based thrift said current conditions make it difficult to be profitable as strictly a portfolio lender. For the same reasons, the company will enter the commercial real estate lending business in its retail banking footprint. These initiatives will begin in 2013.
Nationwide, Hudson City ranks 34th among all mortgage bankers, according to National Mortgage News and the Quarterly Data Report.
Denis J. Salamone, the lender’s acting chairman and CEO, said the current low interest rate/GSE dominated mortgage lending environment is "likely to continue for the foreseeable future."
Therefore, while it will still offer portfolio products, it is also doing loans eligible for sale to the secondary market.
"We may either retain or release servicing on these loans. This will enable us to offer rates that are typically lower than we can offer for a portfolio product and capture more customer relationships,” he said.
As for the CRE initiative, Salamone said Hudson City would leverage its retail bank branches and its residential mortgage relationships.
"Initially, we will participate in syndicated commercial real estate and multifamily mortgage loan deals as we build capacity to grow organically in this market through originations. These types of loans are typically shorter-term than our residential mortgages and therefore help to balance our risk profile. In addition, we can offer commercial real estate customers deposit products that we believe will strengthen relationships and increase the amount and types of deposit accounts on our balance sheet," he said.
For the quarter, Hudson City had net income of $72 million, down from $96 million for the year prior.
It also said that Ronald E. Hermance Jr. is returning as chairman and CEO on Aug. 1. He had been on medical leave since Feb. 10. Salamone will remain as president and chief operating.