Ending months of speculation, Bank of America has elevated Graham Williams, an insider, to its top mortgage post.

The promotion, announced internally this week, fills a vacancy that developed during BankAmerica Corp.'s April merger with Security Pacific Corp.

Sources said the delay was caused by James Jones, who wanted time to size up the mortgage division. Mr. Jones was hired from Wells Fargo & Co. in May to oversee all consumer lending at BankAmerica.

The delay created recurrent speculation about whether the new mortgage boss would be promoted from within or hired from outside. Some even suggested that Mr. Jones would attempt to manage the business directly.

With the Bank Since 1989

Mr. Williams, a mortgage executive at the San Francisco-based banked since 1989, most recently ran its originations, secondary market activities, and portfolio management.

He now takes on the added functions of servicing, marketing, and operations. He will retain his previous rank of senior vice president but gain the title of division director.

Last of Major Changes

A tall man of 39, Mr. Williams is known as a highly demanding boss. He earned his spurs in his previous post at Shearson Lehman Mortgage Co., where he worked for the notoriously tough Walter Blass. Mr. Blass, chairman of the Shearson Lehman Brothers unit, is known in the industry as "the Master Blaster."

Bank of America's roster of mortgage managers has been in flux ever since the Security Pacific merger, but Mr. Williams' appointment is apparently the last of the big changes.

"This is it," he said in an interview. "All my direct reports are in place."

Earlier this month, Mr. Williams lured Claus Lund from SunAmerica Financial to manage secondary market sales.

Bank of America is the largest mortgage originator in California and one of the 10 largest in the country. In the first half of this year, it wrote an estimated $5.2 billion or mortgages.

Job Was Turned Down

Under the merger plan, Scott McAfee of Security Pacific was supposed to take the top mortgage slot, while Frank Schultz -- Bank of America's mortgage chief since 1987 - was to assume broader responsibilities in consumer lending.

But Mr. McAfee turned down the post at the 11th hour, citing "personal reasons." Mr. Schultz quit the bank in June to become chief executive of ITT Financial Corp. in St. Louis.

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