SouthStar Funding news briefsMortgagePress.comSouthStar, option ARMs, increases in sales and staff
SouthStar launches five-year fixed Choice Option
Wholesale lender SouthStar Funding LLC has introduced a new option
for its Choice Option ARM product that is designed to simplify
payment options and reduce the risk associated with option ARM
products. The new five-year fixed Choice Option ARM features a
fixed minimum monthly payment for up to the first five years of the
loan, virtually eliminating required payment increases that are
typical of these products. With the five-year fixed Choice Option
ARM, the borrower's minimum monthly payment is fixed for up to five
years based on an introductory rate as low as 2.99 percent, and all
three other monthly payment options are still available:
interest-only, 30-year amortized and 15-year amortized.
Additionally, SouthStar Funding has added a 40-year amortized
option on its Choice Option ARM product, which lowers the required
monthly payment even more.
Because the minimum payment is usually fixed for the first five
years, brokers no longer need to explain the complexities of
potential annual increases in monthly payments, which could be as
high as 7.5 percent, as they do with traditional option ARMs. This
greatly simplifies the product for the borrower while enabling him
to better plan for optimal cash utilization and maintain a low
monthly payment option. Furthermore, because the five-year fixed
Choice Option ARM includes a 110 percent cap on negative
amortization as opposed to the 115 percent cap associated with
traditional option ARMs, risk is greatly reduced for borrower,
lender and investor.
"We designed the five-year fixed Choice Option ARM with our
customers' needs in mind," said Mike Fierman, executive vice
president and national production manager for SouthStar Funding.
"Due to the potential minimum payment increases, most option ARM
products can be confusing to borrowers and difficult for brokers to
fully explain. Providing a fixed minimum payment option for the
first five years simplifies the product for brokers and borrowers,
and decreasing the negative amortization cap greatly reduces the
risks associated with negative amortization and minimum
Based off of the Monthly Treasury Average Index, SouthStar
Funding's Choice Option ARM product provides payment flexibility
for borrowers, enabling them to choose the best option for them
from month-to-month. The Choice Option ARM is available to
borrowers with a credit score as low as 620 and is available on
most property types. The product is credit score-driven and is
offered for loans up to $3 million. Unlike many other option ARMs,
SouthStar Funding's Choice Option ARM allows up to 100 percent
combined loan-to-value and can be combined with interest-only
seconds and HELOCs.
SouthStar Funding increases staff 18 percent, production
40 percent in 2005
SouthStar Funding LLC has increased its staff by 18 percent in its
Atlanta, Denver, Orlando, Fla. and Irvine, Calif. operations
centers and in its 27 sales offices around the country in 2005.
Along with the 18 percent staff increase, SouthStar Funding's
mortgage loan production rose by approximately 40 percent. The
wholesale lender boasts a total staff number of 828 and total
volume of $6 billion.
"Our continued focus on providing competitive products and
superior personal service to our brokers have enabled SouthStar
Funding to continue growing at a time when many in the industry are
struggling," said Kirk Smith, president of SouthStar Funding. "As a
result of our growth, we have an ongoing need to identify, hire and
train people that can help us maintain our growth and continue
delivering on our service promise."
SouthStar Funding's growth has been consistent throughout the
country with its Atlanta headquarters achieving an employment
increase of 33 percent, its Denver operations center realizing an
increase of 27 percent and its Orlando, Fla. center seeing an
increase of 31 percent. The recently opened Irvine, Calif. office
added 28 full-time employees in 2005.
For more information, visit www.southstar.com.