Tight ship practices lead to record expansion for Met Bank.

Mark R. DeFazio, president and CEO of Metropolitan National Bank, says the institution ended the first half of 2007 "poised to achieve a record increase of nearly 100% in residential mortgage lending for the full year."

"We expect to lend about $300 million in 2007; more important than the impressive growth is the fact that we will do it with the tightest lending guidelines we've ever had," says DeFazio. Senior VP Judah Langer, who heads up the bank's residential lending, notes that the mortgage unit booked $153 million in loans through the second quarter compared to $167 million in all of 2006.

Langer says that "despite the collapse of the sub-prime market, sluggish home sales and the highest housing inventory in 15 years, we are well positioned to maintain our lending pace through year's end."

DeFazio is quick to point out that Metropolitan National Bank is not a sub-prime lender nor has it ever been but he said that the collapse of the sub-prime market did have a collateral impact on all banking institutions.

For example, he says, there was a decrease in demand in the marketplace and secondary investors who purchase mortgage loans became much more conservative.

Metropolitan National Bank "weathered the storm" because it had strict lending procedures and standards in place ever since it created its one to four family mortgage unit, according to DeFazio. Meanwhile, he says interest rates remain relatively low and are attractive to a sufficient number of home buyers to allow continued growth of the bank's residential portfolio.

Langer says: "Although we've always had robust risk management procedures in place as is evident in the quality of our loan portfolios we did what any prudent banker would do under the uncertain conditions that were evolving in the industry.

"We put into place new lending restrictions and criteria increasing credit score requirements, limiting loan to value ratios and insisting on better documentation," he says.

Meanwhile, Langer is in the process of expanding his operations. He has already increased his closing department staff and has plans to add underwriting and quality control staff. "We opened a new office in Rockland County in June to help us penetrate the markets north of the City."

Metropolitan National Bank was recently cited by American Banker as the only one in New York that made its annual list of top commercial real estate lenders among "independent banks with less than $1 billion in assets."