The recent disclosure by Fleet/Norstar Financial Group that it is considering sale of a stake in its huge mortgage banking operations will be followed by a quick decision.
J. Terrence Murray, Fleet's chairman, said in an interview with American Banker this week that the company will decide within 90 days. He refused, however, to predict the outcome.
Fleet, based in Providence, R.I., surprised the mortgage world when it disclosed in a regulatory filing that it is mulling a spinoff of a majority or minority interest in its mortgage banking ventures. The operations - one mortgage company in Milwaukee and another in Columbia, S.C. - service nearly $60 billion of loans.
No Intention to Leave Mortgage Banking
The Fleet chairman indicated that the deliberations stemmed in part from limits imposed by regulators on the amount of purchased servicing rights that banks may count toward capital.
"That is a battle we've been fighting for 10 years on various regulatory fronts," he said. "We don't see that being resolved. It's been debated and debated and debated."
But he said that Fleet had no intention of leaving mortgage banking. "We think it's a very good business - we want to be in it," he said. "We happen to be optimistic about the industry. The question is what is the best framework to grow in."
