Brooklyn Broker Goes Banker & More

On any given day, it’s hard to know where you might find David Sadek.

He might be wheeling and dealing on the phone in his Englewood office amid family photos, New York Mets memorabilia and signed photos of President Bush and first lady Laura Bush.

Or you may find the chief executive of First Financial Equities down at the Trump Royale, a new condominium development in Miami Beach, getting the latest loan sales results from his manager.

Or he may be out plying the waters of New York Harbor at the helm of his 41-foot cruiser, A Loan at Sea, dodging Jet Skis and serving up sushi and shish kebab to investment banker clients who buy the loans his company makes.

Sadek, 41, is one of many who have made fortunes in a long-running mortgage lending boom as Americans’ appetite for residential real estate and non-conventional loan products has taken off.

And the Brooklyn native and father of five seems to be enjoying the ride.

“It is a good time to be in the mortgage business,” he says.

Sadek worked for Fairmont Funding Ltd. in Brooklyn during the late 1980s as an underwriter and head of a title insurance division.

He served one year as vice president of First Community Resources, a finance company in Teaneck before setting out on his own.

He began modestly enough, launching his company from a spare bedroom in his Teaneck home in 1991.

Today, First Financial has 110 employees and more than 30 offices scattered around the country, although most of its loans are made in New Jersey and New York.

Sadek expects the firm to originate about $1 billion in mortgage loans this year, up from $300 million just five years ago.

The company makes conventional 30-year fixed rate loans, but it also makes a variety of non-conventional loans, including risky interest-only and negative amortization loans aimed primarily at investors who are more concerned about rental income than building equity.

“The buyers of these mortgages are gobbling them up,” he says, adding that those secondary market players who convert bundles of loans into securities may be shortsighted in light of concerns that property values backing the loans could fall.

Sadek started out as a mortgage broker, arranging loans for banks and other lenders in exchange for commissions. He is now a mortgage banker as well, licensed in more than a dozen states.

As a mortgage banking firm, First Financial comes up with the cash to lend, makes the loan approval decisions and derives most of its revenue by selling the loans to Wall Street investment banks.

It recently launched a wholesale lending business, providing funding for other lenders as well.

The firm also acts as a “correspondent” lender, arranging loans under contract for Washington Mutual and others.

A higher-risk, higher cost “subprime” loan division, doing business as The Mortgage Doctors, serves customers with less than perfect credit histories.

Vice President Ari Sorotzkin, who has been with Sadek almost from the beginning, added another wrinkle to the business, forging relationships with condominium developers in New York and Florida that give First Financial exclusive rights as on-site lenders.

Sorotzkin, who recently arranged the company’s largest loan — a $5 million loan on a second home on Nantucket Island — also specializes in serving high net worth residential mortgage clients.

“We have a special group of products geared for the high net worth guys,” Sorotzkin says.

In the past couple of years, the company has outgrown its Rockwood Place headquarters overlooking Route 4 in Englewood, and on Feb. 1 will move to larger space at the Glenpointe hotel and office development site in Teaneck, Sadek says.

Other changes may be coming soon.

Sadek says he has raised more than $10 million from investors to start a commercial bank tentatively to be called First Financial Community Bank. The bank could be up and running in Teaneck in a year or so, subject to government approval. The mortgage company will be folded into the bank, he says.

“That way there’s an earnings engine right away,” he says.

Being a bank would give the company the ability to gather consumer deposits which for lenders, is a relatively low-cost source of funding to make loans.

As a bank, the company also will hold on to some of its loans instead of selling all of them on the secondary market as it does now, and that is expected to provide a more stable long-term cash flow.

Being a commercial bank would bring some marketing advantages too, Sadek says.

Having a community bank in town would provide more visibility, he says.

Also, loan customers will receive a bill every month with the company logo on it, and “that will make them be more likely to call us when they want to refinance,” he says.

e-mail: newman@northjersey.com