COLUMBIA, S.C. -- Fleet Mortgage Group said it has entered into an alliance with Banco Mexicano to explore the development of a mortgage' banking business in Mexico.

The announcement was made jointly on Wednesday by Michael R. Zucchini, vice chairman of Fleet Financial Group and chairman of the mortgage group, and Manuel Gonzalez Sordo, executive vice president of Banco Mexicano.

Mr. Zucchini said the partners have the expertise and scale to serve the rapidly developing Mexican housing market.

The companies signed a letter of understanding that calls for creation of a Mexican mortgage banking operation with products that would be packaged for sale in the secondary market, first through private placements, and later through public-market securitization.

An evaluation and planning phase will precede the signing of any formal long-term agreements.

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