First Union Mortgage eyeing big expansion.

First Union Mortgage Corp. has ambitious plans for expansion of its loan originations next year in at least part of its turf.

The unit of First Union Corp., Charlotte, N.C., expects to process $1.1 billion in applications next year from people in Virginia, Maryland, Washington, and the Boston area.

The $1.1 billion would be an increase of more than 35% from this year's $800 million and stem largely from the acquisition earlier this year of Dominion Bankshares, Roanoke, Va., and First American Metro Corp., McLean, Va.

This projection was buried in an announcement by the mortgage company that it was adding 55 employees to the staff of its processing center in Virginia Beach, Va., immediately and expected to add more workers next year.

The unit has a servicing portfolio of about $38 billion.

The move will almost double the staff of the processing center and will add about $1.5 million a year to payroll.

The Department of Housing and Urban Development may be wasting its time in trying to draft regulations under the Real Estate Settlement Practices Act that are acceptable to everybody -- at least in one comer of the country.

The New Jersey banking commissioner, Jeff O'Connor, has announced he will introduce legislation to ban real estate brokers from acting as mortgage solicitors. "Where real estate agents become involved in the mortgage banking process, potential conflicts arise," Mr. Connor told a joint meeting of New Jersey mortgage band banking groups.

"The department thinks it is time to put an end to the practice where a real estate agent, acting as a solicitor, may be steering business to one lender and perhaps receiving an illegal referral fee," he said.

"The question must be asked: Can a real estate agent serve simultaneously as a mortgage solicitor for a related or unrelated mortgage banking concern? I think not, both because a referral fee appears to be paid and because lockout steering occurs."

Computerized Origination Systems

HUD is trying to redraft rules to spell out when fees may be paid, but it doesn't want to slow the development of computerized origination systems linking lenders and realty offices.

The commissioner's hard line is somewhat ironic because New Jersey was the home of some early systems of this type, the most prominent pioneered by Schlott Realtors.

Schlott has since become part of Coldwell Banker, a Sears Roebuck & Co. unit that is now on the block.

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