Chemical Bank, moving quickly to streamline its expanded home-loan business, has agreed to sell the servicing operation of Margaretten & Co., its new subsidiary, along with some servicing rights.
The buyer is BankAmerica Corp., which has eagerly returned to the mortgage business after resolving some strategic and management problems. Now it is intent on expanding across the country.
BankAmerica says it will offer employment to the 260 workers and managers who presently staff the Richmond, Va., center. The facility collects and processes monthly mortgage payments on about $16 billion of loans.
No Specific Amount
The amount of servicing bought by BankAmerica was not specified, but David Frank, president and chief executive of Chemical's mortgage operation, said it was small. An announcement said it included "GNMA and other loans." Margaretten has been one of the biggest Ginnie Mae lenders in recent years.
Margaretten bought the Richmond facility from NationsBank Corp. in September 1992 along with about $7.6 billion of servicing. Margaretten, of Perth Amboy, N.J., then consolidated servicing in Richmond.
NationsBank, meanwhile, is making a bigger push into mortgages again. It was reported to be a bidder for Margaretten and their mortgage properties and recently hired Andrew Woodward away from Fleet Mortgage Group, where he had been president and chief executive.
The operation came under Chemical's wing when Chemical completed its tender offer for Margaretten on July 1.
Chemical intends to consolidate its mortgage servicing at its existing Columbus, Ohio, facility, which services about $40 billion in mortgage loans.
Terms were not disclosed. The deal is expected to close later this quarter.
"The center is a low-cost, highly efficient operation, which will play a key part in our national expansion plans," said Arthur D. Ringwald, executive vice president and head of Bank of America's residential loan division.
"This acquisition also accomplishes our long-standing strategic objective of creating redundancy for our Southern
* California servicing facility."
Mr. Frank of Chemical said, "Our decision to sell was based solely on our desire to consolidate servicing at a single facility, leveraging the significant investment in servicing technology that we've made at Columbus."
Bank of America was the ninth-largest servicer of home loans as of Dec. 31, 1993, with about $43 billion. Chemical Bank was No. 13, but the Margeretten deal has pushed it way up on the list, probably to No. 6. At yearend, Chemical and Margaretten had combined servicing of about $49 billion.