First Union Corp. has been referred to as a "sleeping giant" in the mortgage business.
The nation's sixth-largest banking company keeps a remarkably low profile in the mortgage banking industry, despite having a servicing portfolio of about $60 billion and one of the 20 largest origination networks.
First Union Mortgage's relative lack of attention seems to reflect the personality of its president and chief executive officer, James E. Maynor. The 52-year-old North Carolina native is not prone to put himself in the spotlight, but those who know him say his laid-back demeanor masks a drive for profits and success.
"He comes across as rather low-key, but he's a quick study and sets high performance standards," said Charles M. Reid, president and chief executive officer of United Guaranty Corp., a mortgage insurer.
Mr. Maynor has been at First Union for 30 years and has spent all but six months in Charlotte, its North Carolina headquarters city. He started with First Union's credit card division in 1968. By 1970 he was head of the company's MasterCard accounting division.
In 1976 he moved over to First Union's home equity division and in 1983 was promoted to president of First Union Home Equity Corp. He held this post until 1994 when he was named president of First Union Mortgage.
"I don't know if there's anything First Union would ask to me to do that I wouldn't be willing to try," Mr. Maynor said.
Now Mr. Maynor is turning his full attention to managing First Union Mortgage. He had been pulling double duty for awhile, returning to the top job at First Union Home Equity last March after its president unexpectedly resigned.
He remained head of home equity until November when Chris Oddliefson, the head of consumer finance at Signet Banking Corp. took over after the completion of First Union's acquisition of Signet.
First Union Mortgage isn't as large as the mortgage divisions at other superregional banks, but that doesn't mean mortgages aren't important to the parent company.
"I believe the mortgage product is one of those lead products that a financial institution needs to have to fit customer demand," Mr. Maynor said.
First Union added about $7 billion of servicing through the Signet deal and will gain about another $4 billion when it completes its purchase of CoreStates Financial Corp. this year.
But the company still isn't thought to be as committed to the business as banking companies like Norwest and Chase that have built national mortgage operations.
"Over the last few years First Union has been making sure its servicing operation is efficient and has focused on production in its own market area. But mortgages are not that big for such a big company," said George Bicher, an analyst at BT Alex. Brown.
Other observers said top management at First Union Corp., particularly chief executive officer Edward E. Crutchfield Jr. and president John R. Georgius, are not big fans of the mortgage business, a notion that Mr. Maynor disputes.
"When I thought we needed to do something to strengthen ourselves and be a player in this business, I've had no difficulty getting approval from John Georgius or Ed Crutchfield," Mr. Maynor said.
First Union moved to boost its production business with the acquisition of Center Financial in 1996. This helped catapult First Union into the top 20 originators and establish a major presence in wholesale lending.
Mr. Maynor said wholesale lending accounted for about 45% of overall lending in 1997. First Union's wholesale volume was negligible in 1996.
The company began to deemphasize wholesale lending in the mid-1990s because of profitability problems. So when First Union bought Center Financial, it retained most of the management of the latter's mortgage subsidiary, Centerbank Mortgage, and its Waterbury, Conn., headquarters.
"They understand the dynamics of the business. We are pleased with the staff there and pleased with the integration," Mr. Maynor said.
He said the most fun he gets out of heading the mortgage division is from trying to figure out how to make money in a business that has been plagued by low margins in recent years.
To that end, First Union has set up a mortgage reinsurance subsidiary offshore in order to wring more profits out of the origination business.
And First Union Mortgage has worked closely with other divisions in the lucrative area of subprime lending.
Last year, First Union Capital Markets and Freddie Mac began to securitize subprime loans that were originated by First Union's home equity unit.
Mr. Maynor said First Union began to look at the subprime business about five years ago and approached it cautiously.
For about a year and half, the company originated loans for third parties and sold them on a whole-loan basis. As First Union became more comfortable with the risks involved, Mr. Maynor said, the home equity division began to work with the capital markets group on securitization and with First Union Mortgage on servicing.
"We took the time to learn the business and really understand it," Mr. Maynor said.
Observers said Mr. Maynor's biggest challenge may lie ahead-if First Union acquires a bank with a substantial mortgage operation.
Although it appears First Union will not make another large acquisition for a while, Mr. Maynor is confident that he can absorb another mortgage outfit.
"I don't believe a bank acquisition with a large mortgage company attached to it would cause us any unnecessary problems," he said. "I would welcome that opportunity and challenge."
