Online bad credit mortgage loan

Michael Greco, CEO of MortgageRamp.com, loves the challenge of tackling a job that's not run of the mill. While working at DLJ in the early-1990s when the thrifts imploded, Greco established Column Financial, one of the true pioneers in conduit lending. In 1994, he led the launch of a capital markets group at First Union National Bank.

A 25-year industry veteran, Greco's newest challenge is to grow a fledgling online lender into a household name. He is in the midst of a campaign to raise $50 million to $75 million in capital for MortgageRamp.com, an Internet-based commercial mortgage company owned by GMAC with headquarters in Horsham, Pa., and Charlotte, N.C.

MortgageRamp.com, which debuted with a launch in May, serves as a virtual community where borrowers, brokers, lenders and vendors come together, according to the company's Website. You may be saying to yourself, "Aren't there too many online lenders already?"

Maybe not. MortgageRamp's ties to heavyweight GMAC and its aggressive pursuit of strategic partners combine to give it a leg up o:a the competition, emphasizes Greco. In addition, MortgageRamp.com offers financing in a variety of forms: debt, equity, mezzanine and floating-rate. About 80% of its competitors strictly focus on fixed-rate commercial mortgages, claims Greco.

"Investors are telling us that they believe the survivors in this space will be those players which are old-world companies using their balance sheet, know-how and experience to develop new-world technology," says Greco. "Certainly we consider MortgageRamp.com right down the middle of that fairway."

The online lender is 100% owned by GMAC, which has committed $25 million in cash. Once the capital drive is completed within the next 30 days, GMAC's ownership will be diluted to about 70%.

The news has prompted some of MortgageRamp's competitors to entertain the idea of consolidation, says Greco. "They don't believe they can put the capital in that we can; they would rather join us than fight us."

MortgageRamp may not be the first to test the waters of online lending, but its late entry into the marketplace could work to its advantage by avoiding the mistakes of others. Via the use of focus groups and analysis, MortgageRamp discovered that lenders were frustrated with existing online financial sites because the information they received from borrowers was "junk." A borrower with property valued at $2 million might request a $5 million loan. A lender would spend four hours combing over the entry only to conclude it was a bad loan.

In light of those concerns, MortgageRamp has built in a scrub process whereby it will make sure the information input by the borrower passes the smell test before being forwarded to the lender who makes the credit decision.

"A lot of our competition thought that you would win the race if you signed up 250 lenders. Little did they think about what that meant," says Greco. "About 150 of those 250 lenders only do two to three loans a year. They are tiny players." Instead, MortgageRamp has pursued the top 15 lenders in the industry that close 90% of the business.

Greco says the revenue model resembles a highway with tollbooths placed along the route. The site charges for a virtual broker, should borrowers need one. It charges for the lender when a loan closes. It sells appraisal services. MortgageRamp has its own lawyers that close loans.

The company prides itself on being global with offices in the United States, Canada and Japan. Greco was headed to Paris on business immediately following our interview. "We are about to buy a company in Paris to create an e-commerce platform," he declared.

The son of an army colonel, Greco thrives on the regimen of the fast-paced online world. But he knows this project is a three- to five-year process, which explains why he's signed a four-year contract.

"My analogy is a ball game. We're in the bottom of the second inning. We have scored some runs, we have some men on base, but the game is not over. All I can tell you is we have a deep bench."