Chase Manhattan Mortgage Corp. has bought a $7.6 billion servicing portfolio from Bank of New York Co.'s mortgage unit, the companies announced on Thursday.
The deal increases Chase's servicing portfolio nearly 12%, to $73 billion.
Terms weren't disclosed, but based on prices of other deals, Chase may have paid more than $100 million. Servicing rights often trade for about 1.5% of the portfolio.
Chase and several other top players have been gobbling up servicing portfolios in efforts to become more efficient. Big servicers say they can take on more loans with little additional expense, partly because of their use of sophisticated technology.
"It is also our intent to be a survivor in the mortgage industry as it continues to go through consolidation," said Geoff Dreyer, chief operating officer.
Bank of New York decided to liquidate its lending unit, Arcs Mortgage Inc., Calabasas, Calif., in February. The company could find no suitors for the mortgage company, which had been on the block since last July. It has sold other pieces of the unit, and this purchase marks the final chapter in Arcs's operations.
Bank of New York says it will continue to originate home loans in the New York area through its BNY Mortgage Co. subsidiary.
Chase will use its Monroe, La., and Tampa operations to servicing Arcs' loans. Mr. Dreyer said Chase will be forced to hire some additional staff to handle the new servicing.
Mr. Dreyer said Chase will continue looking for servicing portfolios to buy. He said the company is not interested in any particular geographic concentration.
He said any additional purchase would force Chase to add another servicing facility.
"We intend to be one of those $100 billion servicers," he added.