Norwest Mortgage's subprime unit, Directors Acceptance, said its origination volume tripled last year, to $844 million.

Directors Acceptance, of Carlsbad, Calif., attributed the jump to pricing, effective risk management, and increases in its sales distribution network.

The company reaches homebuyers through the retail, wholesale, and correspondent branches of Norwest Mortgage, which is owned by Wells Fargo & Co.

Judith Berry, president of Directors Acceptance, said its business model is unique, because "we leverage off of the core mortgage-company infrastructure extensively."

The growth in Directors Acceptance volume has come from realizing this cross-selling potential with "more and more of the salespeople adding subprime to their menu of products," she said.

Subprime specialists suffered last year-particularly in the fourth quarter-from prepayments of loans and investors' unwillingness to buy their debt, noted Mark H. Adelson, managing director at Moody's Investors Service. He said they are "beginning to bounce back now, but are not out of the woods."

Norwest was able to weather the storm because subprime is not its only business.

"When others are in trouble, it's a time of opportunity for those who are well capitalized," Mr. Adelson said. Companies with more capital can be aggressive about hiring new staff and choosier about whom they make loans to, he said.

Last month Directors Acceptance opened its sixth underwriting office, in Baton Rouge, La., with a staff of 112. The office underwrites and funds subprime loans referred by mortgage brokers.

In January 1998 the company also opened an underwriting office in Grand Rapids, Mich., to focus on customers in the Midwest, where it plans to expand. Ranked by state, Michigan has the company's second-highest origination volume, second only to California.

Norwest Mortgage's wholesale units have also been growing to meet the demand for subprime loans. In November, Norwest hired 33 subprime account executives and managers. The wholesale operation now has five regional subprime sales managers and 51 subprime specialists in its sales force.

Norwest's subprime unit is technologically savvy and has put a lot of emphasis on quality control, said Nehal Farooqui, an analyst with Moody's. He said most of Norwest's subprime borrowers "were much higher in quality" than those served by other subprime specialists.

Rod Dubitsky, a Moody's vice president and senior analyst, attributed the difference to Directors Acceptance's bank connection.

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