New York Mortgage Company offering lower rates

Real Estate Weekly, Jan 30, 2002

In a move to penetrate a lending sector dominated by the private banking units of major institutions, The New York Mortgage Company LLC has begun offering adjustable-rate jumbo home mortgages as low as 112.5 basis points (1 and 1/8 percentage points) over the London Interbank Offered Rate (LIBOR) index. Currently, that translates to 2.873%.

President Steven Schnall says the low-cost mortgages are being offered as one-month and six-month adjustables, interest only, for terms of up to 40 years on $500,000 to $5 million, with no pre-payment penalties.

"This is an extremely competitive product for loans on one-to-four-unit residences, cooperative apartments and condominiums," says Schnall. "We're in a position to challenge the major players for a share of their business with high-net-worth individuals."

Joseph V. Fierro, chief operating officer, says: "We have the flexibility to customize this type of loan to a borrower's specific needs. For example, the loan can be easily tailored in different ways, thus making it desirable for use by financial planners and CPAs. We can easily reduce the upfront costs (points) in exchange for increasing the margin above the LIBOR index."

He adds that the mortgages can also be amortized for 20, 30, or 40 years instead of offered as interest-only loans.

Both Schnall and Fierro observe that LIBOR has historically paralleled the U.S. federal funds rate and therefore is likely to continue closely tracking the course of the American economy. "The Fed has been hinting at yet another rate cut," says Fierro. "But even if the rate does start rising sometime in the next year or so, the increase is likely to come in small increments."

The New York Mortgage Company, which closed on more than $1 billion of loans in 2001, is a direct lender and also offers products from more than 50 other lenders. Founded in 1991, the firm is one of the nation's fastest growing mortgage banking/broker-age companies, and is licensed in New York, New Jersey, Connecticut, Pennsylvania, Maryland, Virginia, Georgia, Florida and South Carolina.