Homestar Mortgage of Paramus N.J. is planning its first term securitization, tentatively scheduled for early in the fourth quarter, a company official confirmed. The inaugural offering, backed by Alt-A collateral, will be roughly $200 million in size via a yet-to-be disclosed underwriter. Also, Homestar is setting up a $300 million warehousing facility for liquidity between its term securitizations.

The privately held company hopes to eventually become a quarterly Alt-A MBS issuer, and until then it expects to bring a new term

deal every four to five months, said Jeff Pancer, head of capital markets for Homestar.

The pending $300 million single-seller warehousing facility will be in addition to the three-facility syndicate Homestar currently has outstanding with GMAC-RFC, RBS Greenwich and UBS Warburg. There is no word on what underwriter will arrange the new facility.

In the sudden rising interest rate environment, niche mortgage lenders are scrambling to differentiate themselves from the refi-driven business plans of their larger competitors. Homestar is no different, divvying up its originations three ways between GSE conforming prime, non-conforming subprime and non-conforming alternative mortgage product.

Pancer said Homestar originated $675 million in July alone, of which roughly $60 million was Alt-A product. The majority of its Alt-A loans are made in the Western U.S.: Arizona, California, Colorado and Nevada. Homestar's agency-conforming business, by contrast, is concentrated in the Southeast U.S., primarily Georgia and Florida.

Unlike the large lenders that dominate the mortgage ABS landscape, roughly half of Homestar's originations have been refinancing activity, with the other half coming in the form of loans for newly built housing. Homestar is a licensed broker in 42 states and has 22 branch offices located in eight states.

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