Despite the turmoil in the housing market over the last several years, residential mortgages have remained an attractive business segment for Racine-based Johnson Bank.
For the third quarter of 2009, the bank was the 22nd largest seller of residential mortgage loans in the country to Freddie Mac, and the largest Wisconsin-based bank. During the first nine months of the year, Johnson Bank sold more than $1.2 billion worth of mortgages to Freddie Mac, according to Inside Mortgage Finance DBS Database.
A large number of the mortgages that Johnson Bank is selling to Freddie Mac are participants in federal mortgage modification programs, said Bill Winkler, director of mortgage. The federal program has allowed home owners whose mortgage had been purchased by Freddie Mac by Jan. 1, 2009 to apply for relief benefits such as lowered interest rates.
Johnson Bank has become one of the top banks in the nation in servicing mortgages receiving relief, Winkler said.
“We offered it as soon as it became available,” he said.
Johnson Bank sells about 97 percent of the residential mortgages that it originates, but retains rights to service those mortgages. Because of that connection, the bank’s customers have had little trouble in receiving mortgage relief, Winkler said.
“We want to work with you (the client) and we’re there with you the whole 30 years of the loan as an advisor, servicer and partner,” he said. “It’s a little different strategy than a bank who just offers (home mortgages) and sells it off.”
Johnson Bank has also experienced low numbers of foreclosures over the last years, Winkler said, because it was not overly aggressive in mortgage lending in the early 2000s.
“We made the right loans to people who could afford them to start with,” he said. “And those clients that are coming back were qualified the first time. We’re just fortifying their position.”