Fleet Mortgage Group has hired Thomas C. Palmer as executive vice president for loan production, sources close to the company said.

The move comes more than a year after Phillip W. Bracken, Fleet's last production chief, left. The mortgage operation's earnings slumped 14% in the second quarter, a decline that was attributed to weaker loan production.

Mr. Palmer will join the Columbia, S.C., subsidiary of Fleet Financial Group in September, the sources said. Mr. Palmer and officials at Fleet Financial Group would not return calls seeking comment.

Mr. Palmer, whose last job was with American Home Funding, has also held positions in the last few years with Alliance Mortgage and BancBoston Mortgage Corp.

The loan production position has been vacant since June 1996, when Mr. Bracken left. In December Fleet Mortgage chairman Michael R. Zucchini said the loan production chief's duties were being split between three people.

H. Jay Sarles, Fleet Financial's chief administrative officer, succeeded Mr. Zucchini as chairman of Fleet Mortgage in January and oversees the unit from Fleet's Boston headquarters.

After that change, Fleet Mortgage hired the executive recruiting firm Heidrick & Struggles to find an executive vice president for loan production.

Mr. Palmer is joining Fleet Mortgage at a time when it has altered its production strategy to boost volume and increase profits.

Earlier this year Fleet left retail lending on a national basis; it is now focusing its retail efforts in the northeastern markets where Fleet Bank has a significant presence.

The mortgage group sold five of its retail offices outside the Northeast to PNC Bank Corp. in March and closed down the remaining 12 offices.

Many industry observers have said that Fleet Mortgage has been a laggard when it comes to technology, but it seems that Fleet is taking steps to catch up. According to its latest filing with the Securities and Exchange Commission, Fleet Financial recorded a $41 million impairment charge in the second quarter to write down an investment in a new mortgage origination system.

One of Mr. Palmer's former co-workers thinks he is up to the task of fixing what is wrong at Fleet.

"He brings a lot to the table for Fleet," said Hugh R. Harris, president and chief operating officer of HomeSide Inc. "He can really help Fleet get back on track." Mr. Harris and Mr. Palmer worked together at BancBoston Mortgage, which is now a part of HomeSide.

Sources said that Mark L. Korell, formerly the chief executive officer of Norwest Mortgage, had considered joining Fleet Mortgage as CEO. But Mr. Korell instead took a job with IMX Mortgage Exchange, a start-up mortgage technology firm in San Ramon, Calif.

Fleet is no longer looking for a chief executive, the sources said. Michael J. Torke remains Fleet Mortgage's president.

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