first nine months, but out-of-state competitors made serious inroads. The San Francisco bank was No. 1 a year earlier, too. But Norwest Mortgage and Nationsbanc Mortgage Corp. have become big players in the California market this year. BofA has remained on top by doing what it does best, said Wayne Perry, senior vice president and head of national production. "We are not trying to compete in niche areas," Mr. Perry said. Instead, BofA boosts its volume by originating home mortgages through its retail bank branches, he said. He did acknowledge that out-of-state lenders are creeping into B & A's territory, and that a number of them are doing it well. Dallas-based Nationsbanc has done particularly well, he said, pricing aggressively. Bank of America doesn't intend to keep up with such pricing, he said. Nationsbanc was California's No. 6 home lender in the first nine months, with $1.8 billion of originations. It did only $20 million all last year. In January, Nationsbanc bought two small Pasadena-based mortgage companies as a springboard for its leap into the California market. Nationsbanc has a strong wholesale presence in California, which accounts for about 75% of its West Coast originations. A Nationsbanc spokeswoman attributed its success in California to pricing and a diverse menu of products. She said that since it has a large presence in Florida and Texas, California was the next large market to move into. When the company saw attractive acquisition candidates available in California, it jumped in, she said. "We will continue to price competitively in that market," the spokeswoman said. Another out-of-state lender, Norwest Mortgage Inc., has moved into the top 20 lenders in this market, where it had only a slight presence last year. Norwest's acquisition of Directors Mortgage last year helped the Des Moines-based lender make inroads into California. Chuck Omar, executive vice president and production manager at Norwest Mortgage, said California is at or near the bottom of a market slump, which is the best time to enter. "We want to be in place to get the rebound," Mr. Omar said. The shift to a fixed-rate market helped Norwest wrestle share away from the large California thrifts, which primarily make adjustable rate loans, Mr. Omar said. Norwest began originating loans for customers of Wells Fargo Bank, San Francisco, in October. Mr. Omar said he expects origination volume through that channel to pick up in the beginning of 1996. That would further bolster Norwest's California presence. Norwest's long-term strategy is to be in all 50 states, so it can weather regional ups and downs.

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