Growing Greenlight Expands in Spectrum
By DANIEL D. WILLIAMS
Greenlight Financial Services Inc. has good timing.
The Irvine-based mortgage lender has ridden the housing boom and low interest rates to fast growth since opening its doors last fall.
It just signed on for about 30% more space at its headquarters in the old Western Digital Corp. building in the Irvine Spectrum. Greenlight is set to have 33,000 square feet of space in January.
“We’ve benefited by the huge home growth in Southern California,” said Jeffrey Lisinicchia, Greenlight’s chief financial officer.
Greenlight launched with 12 workers last September. It had 39 employees by the end of last year and has 318 today. Plans call for another 200 by the end of next year.
The mortgage lender originated $1 billion in loans in its first nine months through June. It expects to sell about $900 million more in the second half of the year. About 90% of Greenlight’s business has been refinancings.
Lisinicchia joined Greenlight after stints as controller at Irvine-based Cordax Inc. and chief financial officer for Internet data collector Digital Convergence Corp.
Prior to that he worked at GMAC Mortgage Corp., including a stint as vice president of financial analysis at GMAC’s Ditech.com mortgage lending unit in Costa Mesa.
Joann Pham, Greenlight’s founder, owner and chief executive, also came to the company from Ditech.com’s executive ranks.
Greenlight makes first and second mortgage loans at fixed or adjustable rates. Most of its loans are made via its Web site or over the phone.
Orange County counts a number of mortgage lenders that focus on borrowers with less than perfect credit.
But Greenlight is different in that it makes loans to borrowers with good credit. Lisinicchia said the company might expand to making subprime loans sometime next year.
Risks for the company come mainly from economic conditions.
If interest rates rise, the economics of refinancing will be less compelling, and Greenlight’s business volume could drop. Secondly, with the enormous gains in home values in the past few years, some real estate observers expect the housing market to cool down at best or crash at worst.
In the worst case, some homeowners could find themselves owing more on their mortgages than their homes are worth.
Lisinicchia said he is aware of the risks and that Greenlight’s business model takes into account looming interest rate hikes.
“We believe we’re positioned to pick up more first loan business when that takes place,” Lisinicchia said, referring to loans to homebuyers.
And he doesn’t think rates will climb significantly for at least six to nine months.
The company must “differentiate” itself to compete with big mortgage lenders such as GMAC, Lisinicchia said.
Greenlight guarantees to close loans within 21 days vs. the industry average of 60 to 90 days, he said.
“We don’t require money up front and we don’t have to lock in the interest rate,” he said.
Borrowers can cancel their loans with no “cost or obligation,” according to the company.
Greenlight originates mortgage loans, but doesn’t hold them on its books. Instead, it earns a fee by selling them to a handful of investors such as Wells Fargo & Co. and Washington Mutual Inc., which then package them into securities.
Greenlight uses two lines of credit to fund the loans it makes.
