Equitable subsidiaries form securitized mortgage firm

Real Estate Weekly, Nov 10, 1993

Column Financial, Inc. has announced that MultiFam Mortgage Corporation has been named its exclusive mortgage correspondent for the New York Metropolitan area. Multi-Fam Mortgage Corporation will be responsible for originating multi-family and commercial mortgages in Manhattan, Bronx, Brooklyn, Queens, Staten Island and Westchester County for underwriting by Atlanta-based Column Financial.

A unit of The Equitable Companies, Column Financial is a joint venture between Equitable Real Estate Investment Management, Inc. and Donaldson, Lufkin & Jenrette (DLJ). The loans will be serviced by EQ Services, Inc., the mortgage servicing subsidiary of Equitable Real Estate.

Rutherford Thompson, President of MultiFam, said that this is the first major emergence of new capital in the New York Metropolitan area in over three years. "Since Freddie Mac and most Savings and Loan organizations pulled out of the market in early 1990, there has been a major void in financing multi family and commercial properties throughout the New York area. We believe that this new availability of capital will have a positive impact on the current values of Real Estate which have been severely depressed because of the current credit crunch," Mr. Thompson noted.

MultiFam Mortgage Corporation, whose headquarters are in White Plains, NY, has currently committed to, and is in the process of closing, 218 individual apartment building loans totaling over $240 million throughout the greater New York area. They expect to close an additional 500 new apartment building loans totaling over $600 million, and an additional $400 million in commercial loans in 1994. Currently they are lending at a rate between 8-8.75 percent, with expected closings within 60-90 days.

Through its network of commercial mortgage correspondents, Column Financial underwrites and closes multi-family and commercial mortgage loans between $1 million and $10 million. These mortgages are subsequently securitized in pools by DLJ, a market leader in mortgage securitization. DLJ has underwritten and closed in excess of $1.5 billion in commercial mortgage-backed securities within the last 18 months.

According to Tommy Clinton, President and CEO for Column Financial, "With insurance companies and banks reducing their commercial mortgage portfolios, we can fill a void. The commercial/multi-family loan market is over $1 trillion in size and includes about $325 billion in multi-family loans," he explained. "To date, only about ten percent, or $35 billion, of the multi-family market has been securitized; the commercial market percentage is even smaller."