Barnett Banks Inc. has hired a former Green Tree Financial Corp. executive to study building a manufactured-home loan business, industry sources say.

Barnett reportedly hired John Brink, who was chief financial officer at Green Tree-the undisputed market leader in manufactured-home lending-until March of last year, when he left the Minneapolis company unexpectedly.

The Jacksonville, Fla., banking company refused to confirm or deny its interest in manufactured housing. "We routinely review various business lines across the spectrum," a Barnett spokeswoman said, "but don't comment until we're ready to move forward."

But observers said a foray into the fast-growing manufactured-housing sector by Barnett would be unsurprising. It has already tested the boundaries of conventional mortgage lending with its recent purchase of a subprime mortgage originator, Equicredit Corp., also in Jacksonville.

And with more homebuyers opting for manufactured homes, the sector's profitability is spurring a growing number of banks to take a closer look at the once neglected market.

Manufactured-housing dwellers-whom lenders used to refer to as the "newly wed or nearly dead"-are now more often upscale, middle-income families, according to the Manufactured Housing Institute.

Manufactured-housing lending has kept up a double-digit annual growth rate through most of the 1990s, and the next three years should bring more of the same, according to CIT Group, Livingston, N.J. The finance company made $500 million of manufactured-home loans last year.

Recent manufactured-lending ventures included a partnership between Deutsche Financial Services, St. Louis, with Oakwood Homes, an established manufactured-home lender and builder. The unit, Deutsche Financial Capital, Greensboro, N.C., is pricing its first securities this week, said Fitch Investors Services analyst Jenine Potolsky.

And last week, subway car and airplane manufacturer Bombardier Capital, Toronto, announced it was forming a manufactured-home-lending division.

Securitization has helped fuel the sector's growth: In 1996, $8.15 billion in manufactured-home loans were securitized, up from $1.03 billion in 1991, according to Securities Data Co., Newark, N.J.

Wall Street's comfort level with the loans should continue to increase, said Ms. Potolsky. Loans backed by both the home and the land it sits on are increasing in popularity, she said.

"These look more like a normal residential mortgage loan" than traditional mobile home loans. Such loans last longer and are much less risky, she said. A land-home loan "doesn't depreciate as much, and the borrower is less likely to walk away from the home."

But securitized or not, there's no doubt that manufactured housing continues to be a hot market.

"Business is up all around," said a BankAmerica Corp. spokeswoman, referring to bank's mobile home division. The San Francisco-based lender made $3 billion in manufactured-home loans in 1996. "People are recognizing that it's a better product for the price."

Expanding into manufactured-home lending makes especially good sense for Barnett, observers say. In the South Atlantic region, where Barnett's branches are concentrated, CIT Group projects shipments of manufactured homes will rise by more than 30% in the next two years. u

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