Doral opens first mortgage center in Plaza Las Américas
Doral Mortgage, the mortgage lending division of Doral Bank, is going back to its roots with the opening of its first modern Centro Hipotecario, or Mortgage Center, in Plaza Las Américas shopping center in San Juan's Hato Rey sector.
Doral's origins as a mortgage lender can be traced back to Centro Hipotecario, one of four operating units of parent company Doral Financial Corp., which the Levis family established in the late 1970s. In addition to Doral Mortgage and Centro Hipotecario, these units also included HF Bankers and Sana Mortgage, which are no longer in operation.
REVIVING AN OLD CONCEPT
"We are reviving an old concept, that instead of establishing a full-fledged, full-service bank branch to provide mortgage loans, we are opening these new mortgage outlets to better reach our target market," Jesús Méndez, Doral executive vice president of retail banking & mortgage operations, told CARIBBEAN BUSINESS during an exclusive interview. "From an operational standpoint, these are simpler offices because they are mortgage centers."
The first of Doral's new mortgage centers opened last month in Plaza Las Américas' central corridor. Méndez said the bank had always wanted to have a presence in the landmark mall, which is the largest in the Caribbean.
"We're doing it in a very creative way, since it isn't a conventional office. It's in the central corridor, in a very friendly, nonintimidating way, where you don't have to open a door to get service; you just walk in," Méndez added. "Like other establishments in the mall's hallway, professional staff will be providing services in a very friendly, agile and open way to the public."
The new mortgage centers are designed to provide orientation and service for mortgage loans, and Doral is strategically identifying locations for its next outlets, which are less complicated and costly than brick-and-mortar, full-service bank branches.
"We have in the pipeline the opening of mortgage centers in Ponce, Caguas, Dorado and Hatillo, basically areas with large urban centers where our prospective and current clients live," Méndez commented. "We basically serve a third of the island's population, whether it's from the mortgage or the deposit side."
Doral's strength as a mortgage lender has remained strong, currently in a solid No. 2 position in the local market, he said. Mortgage originations in 2012 amounted to $857 million, which is a 64% increase over 2011.
During the first quarter of this year, mortgage originations totaled $260 million, an 83% increase over same period last year, Méndez noted.
"During the first quarter of this year, Doral averaged $86 million in mortgage originations each month, which is excellent. Our client base continues to be extremely loyal to us," Méndez said.
ROOM FOR REFINANCING
The Doral executive believes, given the island's tough economic scenario, that there is still room for more mortgage-refinancing opportunities in Puerto Rico, as families look to reduce their monthly mortgage payments to increase their cash fl ow to pay for the recent cost-of-living increases in water, electricity and gasoline.
"Despite the recent spike in interest rates, mortgages continue to be at levels where, for many families, it just makes sense to look at the possibility of refinancing. This brings a tremendous relief for many households, in an environment where the cost of living continues to go up," Méndez commented.
As the number of available housing units on the market continues to dwindle, interest in new developments and the financing for them will increase, the Doral executive said. The number of available units, he added, has gone from 25,000 four years ago to less than 5,000 now.
Concurrently with the opening of the new mortgage centers, Doral is also stepping up its cross-selling efforts through its Doral Insurance subsidiary for its clients' large mortgage and deposit base.
Until now, he said marketing for Doral Insurance mainly was subscribed to mortgage-related products and the volume remained relatively small.
"Insurance is one of the areas with the greatest potential. We're currently creating the awareness, first with our own employees. Three weeks ago, we held an orientation fair for our employees at our main headquarters, and the response was fantastic. We are now expanding it to other branches throughout the island. They have realized that beyond mortgage insurance, there are other insurance coverage alternatives they can acquire through Doral Insurance," Méndez said.
To expand Doral Insurance's offerings, the bank is working on strategic partnerships with different insurance firms to have representation in other types of risk, such as property & casualty and personal liability, for instance, which aren't related to mortgage products.
With Doral's large portfolio of clients, Méndez sees great cross-selling potential with Doral Insurance. Doral provides servicing to more than 110,000 mortgages, part of the bank's $11 billion mortgage-servicing portfolio, of which $4 billion is loans owned by the bank, and the remaining $7 billion is mortgages owned by third-party investors.