Frost Bank Revives Residential Mortgages After 22-Year Hiatus
After a 22-year pause, Frost Bank is reintroducing residential mortgages as part of its expansion strategy. The $52.9 billion-asset institution has developed its own loan origination system and hired experienced staff to gear up for the launch.
Frost Bank stopped originating home loans in 2000 as the offering no longer fit its profile. Now, it's re-entering the market despite a challenging climate, with high interest rates and job cuts at major firms like Wells Fargo, JPMorgan Chase, and Bank of America. The bank has developed its own proprietary loan origination system for mortgages and has hired 90 to 100 new employees to strengthen its home-lending unit. Frost Bank has also opened 25 branches in Houston and is expanding with 28 locations in Dallas. To bolster its mortgage lending department, the bank has recruited experienced individuals, including former bankers from Wells Fargo. The residential mortgage product is currently in a soft launch, open to Frost employees, with a full launch planned for this year. Frost Bank's residential mortgage lending peaked in 1998 with $415 million in home loans outstanding, making up 11.4% of its loan portfolio. The bank plans to service its mortgages in-house, aiming to build long-term customer relationships.
Frost Bank's return to residential mortgages is part of its aggressive expansion plan in major Texas cities. Despite market challenges, the bank is confident in its new loan origination system and the expertise of its hired staff. With a soft launch already underway, the full launch of its home-lending product is expected this year.
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