CHARLOTTE, N.C. - First Union Capital Markets Group, a unit of First Union Corp., has acquired a $2.3 billion master servicing portfolio from Bear Stearns Mortgage Capital Corp., a subsidiary of Bear Stearns Cos.

The acquisition more than doubles First Union's master servicing portfolio, to $4.2 billion. The Bear Stearns portfolio includes 10,659 residential mortgages from a variety of servicers nationwide. Terms were not disclosed.

"This attractive transaction puts us well on our way to achieving significant operating efficiencies and economies of scale as we build this business," said Karl Mendenhall, First Union's senior vice president for master servicing in the capital markets group.

"We continue to be alert for additional opportunities to increase our portfolio through further acquisitions, and from First Union's growing retail and wholesale mortgage banking operations."

First Union's master loan servicing unit was established in 1993 to support First Union's mortgage investment banking activities, which include the securitization of commercial mortgages, B&C mortgage paper, mortgage warehousing, and other asset-backed securities.

A master servicer brings together servicing portfolios from a variety of mortgage lenders, bundling the portfolios into a pool for investors. Master servicing is distinct from First Union's traditional mortgage servicing portfolio, which totaled $34.3 billion at March 31, 1995.

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