As rates edge downward, large thrifts plan to guard their market share by competing with mortgage bankers on fixed-rate loans.

During the fixed-rate refinancing boom, thrifts' market share slid dramatically, to about 22% in 1993 from a little over 30% in 1990.

This time around, some of the largest California thrifts - Home Savings of America, Great Western Bank, and American Savings Bank - say they plan an aggressive pursuit of borrowers who want fixed-rate loans.

Already, American Savings has stepped up its business in hybrid Treasury-linked, adjustable-rate mortgages, which carry a fixed rate for the first several years, then adjust.

By yearend, American's executives said, these and other fixed-rate loans will account for 20% of their thrift's $5 billion of annual loan volume.

At Home Savings, president Fredric J. Forster said he wants to leverage the thrift's large portfolio to become a player in all interest rate markets. Mr. Forster has said he wants to double loan volume at Home Savings and sell fixed-rate and other loans into the secondary market.

For thrifts, falling interest rates are a double whammy.

Customers are less interested in taking out new ARMs, since they prefer the certainty of fixed-rate payments at low interest rates. And mortgage bankers target borrowers who already hold ARMs for no-cost refinancings.

By going after the fixed-rate market themselves, thrift executives said, they are trying to make sure that, if their ARM borrowers refinance, it will be into the thrifts' own fixed-rate loans, not those of a competitor.

Falling rates have a big silver lining for thrifts, however, said Sam Lyons, senior vice president of mortgage banking at Great Western Bank.

Interest rate margins, which have been under pressure in the past year, would expand.

So while making new ARMs and hanging on to market share might be a greater challenge, the yield on loans already in portfolio should post a healthy increase.

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