Chase Manhattan Corp.'s mortgage subsidiary is close to a deal that would give it top dollar for a $9 billion portfolio of servicing rights.

Mortgage servicing -- the job of collecting loan payments, remitting them to investors, mailing monthly statements, and generally keeping track of borrowers' accounts -- has become a more valuable asset this year as interest rates have fallen.

Homeowners are less likely to refinance their loans, so servicers can expect to collect fees for servicing the loans for a longer period.

The servicing Chase is auctioning is not for loans that it originated. Rather, Chase acquired the servicing rights in two bulk purchases, according to servicing brokers.

The average age of the loans is 18 months, which means most were originated in early 1998. If Chase bought the servicing sometime last year, when the refinancing boom depressed servicing values, it will make a pretty penny on the sale.

Chase is aiming to sell the servicing for 2.4% to 2.5% of face value, or $216 million to $225 million, industry sources said.

Servicing brokers said that initially potential buyers were only willing to bid as high as 2.3%, or $207 million.

But on Wednesday a source familiar with the situation said the banking company expected to have a winning bidder that afternoon and that the bid would be in its target range. Chase officials confirmed the auction was taking place but would not comment further.

Servicing advisers said a portfolio like the one Chase is auctioning would have fetched less than 2% of face value last year. But with an average interest rate of 7.21%, the portfolio is "a beauty" in today's rising interest rate environment, one broker said.

With rates for conventional fixed-rate loans now over 8%, borrowers in the auctioned portfolio are unlikely to refinance soon. The portfolio also pays a relatively high servicing fee for conventional loans: 45 basis points.

Though large, the package is just a drop in the bucket for Chase Manhattan Mortgage, the leading servicer of home loans. The Edison, N.J., unit's recent acquisition of Mellon Bank's mortgage unit boosted its portfolio by $55 billion, to $292 million. Even after selling $9 billion worth of servicing, Chase will still be No. 1; the second-largest servicer, Bank of America Corp., has $274 billion.

Bayview Financial Trading Group in Miami is handling the auction for Chase.

Meanwhile, the servicing portfolio of Colonial Mortgage is off the block. Colonial Bancgroup of Montgomery, Ala., was trying to sell its entire mortgage unit this summer, but on Monday it announced that Union Planters Corp. of Memphis had agreed to buy its wholesale origination offices.

"The servicing is not for sale now," said Ronnie Wynn, president of Colonial Mortgage. The sale of the wholesale offices achieved Colonial's goal of focusing the mortgage company on states where its parent bank operates, he said.

Finally, PNC Bank Corp.'s Vernon Hills, Ill., mortgage unit said it had bought $4.8 billion of servicing from Dime Savings Bank's North American Mortgage Co.

Dime, the 18th-largest servicer, regularly sells chunks of its servicing portfolio, brokers said. PNC, the 12th-largest, has publicly stated its intention to get out of the ranks of the midsize players and into the big leagues.

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