In a twist on the current emphasis on high-volume, low-price mortgage originations, US Bancorp is looking actively to improve relationships with mortgage customers.
After its merger with West One Financial Services, Boise, Idaho, is complete, the company is going to focus on its branch profitability rather than the bottom line in its mortgage portfolio, said P.K. Chatterjee, executive vice president of the retail lending services group.
"In the old operation, there was a 'the more we originate, the better off we are' philosophy. If you get caught up in that, some other things fall by the wayside," he said.
Instead, Portland, Ore.-based US Bancorp is going to try to cultivate a greater relationship with personnel in order to encourage them to cross- sell products. Mortgage customers, Mr. Chatterjee said, often have high credit quality, making them a desirable commodity when one is peddling other bank products.
To encourage cross-selling, the bank will be offering a new compensation system for branch personnel.
The company is hoping for $1 billion in mortgage originations for 1996, and sees its servicing portfolio growing to $6 billion. Mr. Chatterjee is committed to holding onto all mortgages after origination, and keeping a tight rein on servicing.
He observed: "When people buy a mortgage these days, the question they ask their originator is, 'Is this bank going to be able to do this for me for 15 years?' " When mortgages are turned over several times to different servicers, problems often arise, he said.
Part of their company's new focus includes locating a leader for the mortgage division. Cliff Frydenberg, who formerly filled that spot while serving as president of subsidiary US Savings Bank, has left the company. West One, with its segmented mortgage operations, did not offer any potential candidates, Mr. Chatterjee said.
US Bancorp ran several ads to find a manager for the mortgage division. The company does not have any definite candidates at this time.
At the end of 1994, US Bancorp sold off the majority of its loans with servicing included, and 53 origination offices. This represented a move away from the philosophy of origination just for volume, Mr. Chatterjee said, but not that the company plans to eliminate their mortgage business altogether. "We are by no means out of the mortgage business," he added. "It is one of our cornerstones."
