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MIDDLETON, Wis. – Two months after CUNA Mutual Group announced its decision to sell its mortgage operation, CUNA Mutual Mortgage Corp. (CMM), to PHH Mortgage, 18 former CMM employees have formed their own mortgage banking company in Middleton, Wis., a suburb of Madison. The new company, Greystone Residential Funding, is a subsidiary of Greystone & Co., a financial services and private investment company based in New York that has 30 offices in 18 states. The company and its affiliates manage or own more than $10 billion in assets. The initiative to form Greystone Residential Funding was led by Dan Rotert, who formerly was senior vice president and chief operating officer for CMM and is now the president of the new Greystone Residential Funding. The company was incorporated on Nov. 8. Rotert left CUNA Mutual Mortgage in February 2004 when he said he “was no longer comfortable with the direction CUNA Mutual Mortgage had as a mortgage company. I believe the solution we provided to the credit union market under the CUNA Mutual Mortgage banner was something that was needed and necessary. It was apparent to me then that whatever direction they were taking wasn’t compatible with my ideas.” Rotert said he left CMM with the intention of forming another company. Shortly afterwards, he formed investment banking relationships with some firms in New York to help attract capital for his new venture. Rotert said Greystone & Co. was one of the companies that expressed interest in helping him launch his business. “They fit well into the type of corporate culture and leadership I had, they’re exactly the kind of team we were looking to partner with,” he said. Of the 18 employees, all of who are former CMM employees and who will initially staff Greystone Residential Funding, Rotert said almost all of them are operational staff. There are also two business development officers. The sale of CUNA Mutual Mortgage to PHH reportedly cost the jobs of 160 CMM employees. Tom Pisapia, formerly vice president, secondary marketing and operations for CUNA Mutual Mortgage, and Peter Sorce, formerly vice president, servicing for CUNA Mutual Mortgage, are also now with Greystone Residential Funding both as executive vice presidents heading up the operations area and servicing area, respectively. “I took the best and brightest of CUNA Mutual Mortgage employees and formed the nucleus of Greystone Residential Funding,” said Rotert, adding that his intention is to employ “as many of former CUNA Mutual Mortgage employees as we grow.” Rotert said his objective is for Greystone Residential Funding to invest in mortgages issued by smaller credit unions and banks with less than $1 billion in assets. The company’s goal, he said, is $1 billion in finalized loans for the first year. He also said the company intends to double its work force in the next two months. “Anyone in the mortgage lending business will tell you it’s almost impossible to be in this business and restrict yourself to a single marketplace,” he explained referring to the company’s decision to include small banks in its market sights. “It’s safe to say though that the core of our business is credit unions because we understand that market and we have solutions tailored for that market. Banks are a growth market for us, not a prime market,” he emphasized. Rotert said he intends to bring back to credit unions the types of programs and products that were developed at CUNA Mutual Mortgage to help credit unions compete against larger aggregators and which “evaporated” with the sale of the company to PHH. To do that, Greystone Residential Funding has partnered with mortgage solutions developer PCLender for a front end solution. Rotert said the Honolulu, Hawaii-based company’s system is “very intuitive and provides all the functionality embedded in a single platform with an appropriate interface and ancillary services already integrated into the platform. It’s a holistic platform that’s very competitively priced.” Rotert explained that when he was looking for a solutions provider to partner with, he did a comprehensive evaluation of various point-of-sale mortgage systems on the market, and “PCLender emerged as the clear victor in terms of functionality and ease of use.” Rotert said Greystone has licensing pending in 13 states and is in the process of applying for licensing in the remaining states. His goal is for the company to be licensed to make loans in all 50 states by mid-summer. The former CUNA Mutual Mortgage executive said he has no hard feelings towards his old employer. “They made the decision that best suited them, and they respect my decision to pursue this opportunity. I look forward to working with them and helping serve the mortgage lending needs of the credit union marketplace,” Rotert said. [email protected]

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