Since buying Great Western Financial last July, Washington Mutual Inc. has trumpeted its ambition to be California's leading mortgage lender. But Bank of America has remained firmly in the lead.

Washington Mutual's share of the market has hovered around 5% since October, and Bank of America's around 7%, according to Experian Real Estate Solutions, a research firm based in Anaheim Hills, Calif. In fact Bank of America has made small but steady gains in share since January.

Wamu executives say the refinance boom this year has favored the San Francisco bank, which has an extensive branch network that gives it better access to customers.

Wamu's branch network, acquired in a series of mergers, has not yet been converted to the thrift's marketing program. Indeed, some branches still bear Great Western and American Savings Bank signs. And as was the custom at Great Western and American Savings Bank, Wamu branch employees in California do not make mortgages.

"Brick-and-mortar is very, very important" during refinance booms, said Genevieve Anne Smith, senior vice president of lending and financial services marketing at Washington Mutual.

In turn, refinance loans are an excellent tool to cement customer relationships, Ms. Smith said. When Wamu branch employees start making mortgages at yearend, Wamu's share of the refinance business will probably pick up, she said.

"During periods of refi mania, Bank of America has an advantage over us because of the number of branches they have," concurred Bradley W. Blackwell, senior vice president, residential lending, who works in Washington Mutual's Dublin, Calif., offices.

When mortgages to finance home purchases become a bigger part of the business again, Wamu's strong relationships with real estate agencies across the state will help it gain the lead, he said.

Indeed, Washington Mutual has easily beaten Bank of America in the purchase mortgage business for several months.

From last October to January 1998, Wamu's share of purchase mortgages in California increased steadily-from 5.17% in October to 5.76% in January. By March, however, Wamu's share had fallen to 5.05%, according to the latest numbers from Experian, which cover Southern California counties only.

Bank of America's purchase market share, meanwhile, hit a six-month low of 3.21% in March. The March numbers may rise slightly for both institutions when purchase transactions from the Northern California counties are tallied.

Melding Great Western and American Savings into the Washington Mutual structure has been the Seattle thrift's primary concern in California over the past few months.

In April the former American Savings branches finally converted to the Washington Mutual computer systems. The branches now bear Wamu's name, and checking account customers have Wamu accounts. Great Western's Northern California branches made the switch two weekends ago, and the southern branches will follow next month.

Spokeswoman Libby Hutchinson pointed out that there is often a lull in new business before acquired institutions convert to the buyers' computer systems, because consumers shy away from the technical snafus that could ensue.

The American Savings and Great Western mortgage offices are also being converted to the Wamu systems. American Savings' loan offices converted to Wamu's loan origination system in February and March, and Great Western mortgage offices will convert in June.

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