To the Editor:

This letter is in response to the article that appeared in the Jan. 23 edition of American Banker titled "Ryland Group Paring Down Its Mortgage Operations to Focus on Home Building."

The article has caused widespread speculation that Ryland intends to get out of the mortgage business. Please be assured that the tone of the article does not reflect Ryland Group's views of, or plans for, Ryland Mortgage Co.

To set the record straight, let me clarify our current plans for Ryland Mortgage Co.:

The goal for Ryland Mortgage for 1995 is to grow its operations, to the extent that it can be done profitably, during the course of the year.

Ryland Mortgage Co. will continue to service the loans in our existing loan administration portfolio. However, like many other builder-affiliated lenders, Ryland Mortgage's strategy for 1995 is to sell the servicing rights as we originate new loans during the year.

Ryland's focus right now is on building the strength of our home building operations; the cash that would otherwise be spent on retaining servicing rights is currently needed elsewhere.

The only part of the mortgage operations we are planning to discontinue is Institutional Financial Services, or IFS, which issues and administers mortgage-backed securities.

The sale of IFS supports our strategy of focusing on our core home building and related mortgage-financing operations.

I want to emphasize that Ryland Mortgage Co. is and will continue to be an integral part of Ryland.

Not only does the mortgage company provide Ryland with a significant source of income, it also makes doing business with Ryland convenient and pleasant for our homebuyers. We plan to continue providing this valuable service to our customers. R. Chad Dreier Chairman, president, and CEO, Ryland Group Inc.

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