Luther Burbank Savings creates mortgage division

Luther Burbank Savings, which became the largest local financial institution in Sonoma County by focusing on apartment loans, is now seeking to grab a bigger piece of the mortgage business.

The Santa Rosa lender unveiled plans this week to open a new division that will issue mortgages directly to home buyers. Previously, the company made home loans through a network of independent brokers.

This fall, the company will open new offices in Santa Monica and Newport Beach for its Luther Burbank Mortgage division. It expects to employ residential loan officers at its Santa Rosa headquarters and its seven other savings branches by early next year.

"It is a big undertaking for us," CEO John Biggs said Tuesday.

The company has set a goal to originate $1 billion in loans through the new division by its second year of operation — an amount that would be roughly equal to the total loan business that Luther Burbank will conduct this year, Biggs said.

Biggs, however, cautioned that the home loan business won't double the company's size. Luther Burbank now retains most of its loans, but it likely will sell most of the new home loans to other lenders.

The company hired Jay Robertson, former president of First Capital Mortgage in Los Angeles, to run the new unit.

Biggs said the $1 billion goal is realistic because Robertson oversaw that much business for his former company. Robertson will work out of the new mortgage offices in Southern California.

Luther Burbank has $3.6 billion in assets. About two-thirds of its current lending involves apartment properties.

Biggs said the time seemed right to open the home mortgage division, partly because the company has branches in key markets where it can base loan officers. As well, conditions are improving in the housing market and the company was able to hire Robertson, he said.

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