Centex Corp. is the latest entrant in the manufactured-home loan market. The Dallas home builder and mortgage originator last week launched Centex Finance Co. and named Mick McGlothlen, a veteran of BankAmerica Corp.'s manufactured-home unit and of Green Tree Financial Corp., to head it.

Centex's move comes at a difficult time for the sector. Green Tree, the industry leader, announced in November that it would take a $150 million charge to cover losses from unexpected loan prepayments. The disclosure by Green Tree, which originated $4.9 billion of manufactured-housing loans in 1996, sent the stock of many subprime finance specialists into a tailspin.

The trouble came on the heels of BankAmerica's decision in October to put its unit-the second-largest in the sector, with $3 billion of manufactured-home loans-on the auction block.

Some analysts expressed concern about prospects for a new company in an increasingly competitive business. "I don't know if the industry needs another lender," said Jeff Evanson, an analyst at Piper Jaffray Inc. "Unfortunately, lending is a commodity business. An increase in supply without an increase in demand means declining margins."

Mr. McGlothlen, who joined Centex in September after 11 years at Green Tree and eight at BankAmerica Housing Services, said Centex will not be as aggressive in its accounting as the competition. Most analysts were optimistic that Centex could avoid the sector's pitfalls.

"Home builders generally have much more conservative accounting practices than someone like Green Tree," said James Wilson, an analyst at Jefferies & Co.

Centex's decision to start a manufactured-housing lending arm makes sense, analysts said, because the company has been expanding its manufactured-housing production business. Centex bought Cavco Industries, a producer of manufactured homes, last year.

Mr. McGlothlen said the decision to build rather than buy a lending business means Centex will not have to worry about loans that other companies booked. "We are not going to have the baggage of a portfolio to manage right now. We don't have to worry about cleaning up the past sins of anybody else," Mr. McGlothlen said.

Centex also owns one of the largest independent mortgage originators. Its CTX Mortgage division was the 25th-largest mortgage originator in the first half of 1997, with volume of $2.5 billion.

Mr. McGlothlen said Centex Finance will focus on Texas and Arizona before cautiously expanding into other markets. He said Centex's long-term goal is to be a national lender.

Barnett Banks Inc. also launched a start-up in the manufactured-home loan business last year.

NationsBank Corp., which has since agreed to buy Barnett, already has a manufactured housing unit. John Brink, a former chief financial officer of Green Tree, had been brought in by Barnett to lead the division and will head the combined units for NationsBank.

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