A subprime lender in Brea has received $100 million in financing,its second big cash infusion since its founding two years ago.
Residential Mortgage Assistance Enterprise LLC plans to use the money to build a $1 billion portfolio of loans.
The company, which goes by ResMae, funds home loans to people with imperfect credit. It later sells the loans to investors as securities.
Now the company is set to hold some of the loans it originates, according to Jack Mayesh, chairman and co-chief executive.
Hedge fund TPG-Axon Capital Management LP of New York provided the $100 million last month. ResMae will use the funds as collateral to make and hold subprime loans.
TPG-Axon has a small stake in ResMae and is set get a dividend tied to the lender’s performance in return for the funds, which are like a loan, Mayesh said.
ResMae’s three founders,Mayesh, Ed Resendez and Bill Komperda,started the company in 2003. The partners previously ran Long Beach Financial Corp., which went public in 1997 and was bought in 1999 by Washington Mutual Inc., which still runs the operation from Orange.
ResMae does about $600 million a month in loans in 25 states. Last year it did $2.7 billion in loans, about four times what it did in 2003. So far this year it has done $3.7 billion in loans and is set to do more than $7 billion for all of 2005.
The company has 800 workers, including 425 in Southern California, mostly in Brea.
For more on this story, see the Aug. 8 issue of the Business Journal.
