Heritage Bank contracts with conduit firm to lock up loans

The new deal between Heritage Bank of Nevada and Truckee-based Wholesale Lenders Resources Inc. essentially boils down to one goal, says Heritage President Stan Wilmoth.

Heritage wants to keep its business clients from having to search elsewhere for any of their banking needs, a search that always puts existing relationships at risk.

Wholesale Lenders Resources Inc. acts a conduit for commercial real estate loans that don't fit into the bank's portfolio.

Mark Stebbins, president of Wholesale Lenders Resources, explained last week that his company looks for institutional investors or other buyers for those commercial loans.

It's similar in many respects to the residential mortgage market, in which loans routinely are packaged and sold to big institutions.

But because commercial real estate loans usually are so different from one another, Wholesale Lenders doesn't package the loans. Instead, it looks for institutional buyers one loan at a time.

"The commercial real estate loan market isn't as efficient as the residential market," Stebbins said. But he added, "Financial institutions have developed many ways to offer commercial mortgages outside the scope of a traditional bank portfolio loan."

Wholesale Lenders will maintain an office inside the Heritage Bank headquarters location at 1401 S. Virginia St., allowing the bank's lending staff to bring in Stebbins' team at the early stages of discussions with a borrower.

Wilmoth said Heritage Bank can't estimate how many of its customers might have used the new service if it had been available in the past.

But he said the bank is seeing increased demand for commercial real estate lending as businesses and individual owners of commercial properties look to lock up current rates with long-term, fixed-rate financing.

But within the demand for commercial real estate mortgages, he said, is a variety of individual needs some borrowers are particularly sensitive to rate, for instance, while others are sensitive to pre-payment penalties.

The contract with Wholesale Lenders, Wilmoth said, provides flexibility to borrowers that they might not be available in traditional bank lending.

As an offshoot of the deal, Heritage will process its Small Business Loans through Wholesale Lenders, which has SBA designation as a preferred lender. That provides faster turnaround for SBA borrowers.