With interest rates up, lending volumes down, and the industry in a tizzy, big mortgage companies are seizing opportunities to buy smaller originators.

Last week, National City Mortgage bought the assets of Accubanc Mortgage Corp., a Dallas lender, from Los Angeles-based Pueblo Corp. Meanwhile, FT Mortgage Cos., a unit of First Tennessee, bought Elliot Ames Mortgage, a small outfit based in Los Altos, Calif.

Terms were not disclosed for either deal. Sources familiar with Accubanc said its book value is about $100 million.

"We've always expanded when it's been less than good times," said Leo E. Knight Jr., president and chief executive of National City Mortgage. "In good times nobody wants to sell."

With volume down this year, Mr. Knight said, retail origination businesses are selling at bargain prices "relative to what they were going for last year."

National City's acquisition of Accubanc thrusts the Miamisburg, Ohio-based unit of National City Corp. into the top 10 originators. National City originated $19 billion last year, and Accubanc originated $12 billion. The deal also adds 100 branches to National City's 150 and increases its presence in the West and Northwest, Mr. Knight said.

Accubanc sold its servicing portfolio last year, but its chief executive, William Starkey, vowed to make his company one of the top 10 originators by opening offices and acquiring other companies.

A spokesman for Pueblo said it nearly sold Accubanc in its entirety a year ago but could not find a price to its liking. About a month ago, the investment banking boutique Cohane Rafferty Securities Inc. put Accubanc together with National City.

Observers said Pueblo had to sell Accubanc now or never to cut its losses.

"The value of the company would do nothing but go down," said a warehouse lender.

"If they didn't sell now, they'd be in the tank," said an investment banker.

But Mr. Starkey said that Accubanc was sold simply because Pueblo, formerly IFS Financial, needed to raise capital for its growing business of marketing insurance, long-distance phone service, and other products to Hispanics.

"This was not a fire sale by any means," Mr. Starkey said. "Accubanc was well-capitalized. We were prepared to batten down the hatches and weather the storm we think will present itself in the next 12 to 24 months in mortgage banking. We would have survived."

Accubanc will keep its name and operate autonomously as a unit of National City Mortgage, but without Mr. Starkey. "I have several options available to me," he said. "I haven't made up my mind yet."

Buying Elliot Ames is FT Mortgage's entr e into retail mortgage banking in California, said James B. Witherow, chief executive of the First Tennessee unit. FT Mortgage has six wholesale offices in the state but previously had no retail presence.

Ames is the leading mortgage banker and broker in Silicon Valley, one of the country's hottest housing markets, said Tammy White, its former chief executive officer, who is to become a senior vice president at her firm's new parent. Ames originated $1.7 billion last year through 40 loan officers in five Bay Area offices, said Ms. White. She said she expects the company's total originations this year to drop, to $1.3 billion or $1.4 billion. Last year "was an anomaly," she said. "We're not disappointed at all."

Since the mid-1990s, First Tennessee has been buying small retail lenders with strong local franchises. It gives these units a lot of managerial autonomy and until now has let them keep their names, though next March it plans to rename most of them First Horizon as part of a major branding effort.

Ames is to be put under the auspices of Sunbelt National Mortgage, a Dallas subsidiary of FT Mortgage which coincidentally is run by William Starkey Jr., the son of the Accubanc executive. FT Mortgage came to know Ames through its Sunbelt subsidiary; for which Ames brokered loans.

FT Mortgage has not been immune to the effects of this year's production slump. "We've had our share of layoffs," said Mr. Witherow, who expects the company's total employment to have slumped 18% by yearend.

Mr. Witherow did not attend this week's Mortgage Bankers Association of America conference in Boston. "It's time to hunker down and deal with the reality of the marketplace," he said.

Finally, the protracted saga of Pitney Bowes' Atlantic Mortgage and Investment unit may end this week. Bids for the Jacksonville, Fla., servicing company were due last week, and a deal could be announced this week, servicing brokers said.

Pitney Bowes, a leading maker of postage meters, tried to sell Atlantic this year, took it off the market when its adviser, Warburg Dillon Read LLC., could not find bids to its liking, then put it back on the block using different advisers, Countrywide Servicing Exchange and Wasserstein Perella.

Atlantic services $20 billion of quirky loans that have low balances and high delinquencies. It was a tough sell earlier this year, but higher interest rates mean the loans are less likely to prepay and, therefore, the servicing rights are more valuable. "Interest rates are in (Pitney's) favor this time," said an investment banker.

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