Fleet Mortgage Group, in a move to boost earnings during a lending slump, has put one sixth of its servicing portfolio on the block.

The FleetBoston Financial Corp. subsidiary is looking to sell the servicing rights on $25 billion of home mortgages. The unit currently services $151 billion of loans.

Like its peers, Fleet Mortgage of Columbia, S.C., has been hit hard in the last year by rising interest rates that dampered originations, particularly refinancings. The company originated $4.4 million of mortgages in the first quarter, down 66%.

"This is an earnings play for us," said William B. Naryka, chief financial officer of Fleet Mortgage. "Production is off, and we're doing this sale as a way to try to supplement some of the loss of earnings we've experienced from production being down."

Servicing is the job of collecting payments from borrowers, remitting the funds to investors, and generally managing mortgage loans. When rates rise, servicing rights become more valuable because homeowners are less likely to pay off their loans early and servicers can therefore count on collecting fees for a longer period.

Servicing sales were brisk in the first quarter as mortgage banks of varying size tried to take advantage of the higher prices. Accounting rules limit servicers' ability to write up the value of their portfolios, so selling is often the only way to realize the gains.

Some sellers exited the servicing business altogether. Others claimed they were trying to rid their portfolios of loans that were most likely to be paid off early. But all got top dollar.

In some cases, servicing has traded for more than 2% of face value, which would make Fleet's offering worth more than $500 million.

The mortgage market rout has had no noticeable effect on FleetBoston's bottom line. The Boston banking company earned $957 million in the first quarter, up 45% and topping Wall Street's estimates.

Last year's merger between Fleet Financial Group and BankBoston Corp. "helped diversify their earnings stream, so the impact really now is much less than it was before the deal was consummated," said Kevin Timmons, an analyst at First Albany Corp.

FleetBoston's impressive first-quarter earnings were fueled by its capital markets businesses. But volatility in the markets in recent weeks has called into question whether such profits are sustainable. The servicing sale could replace some lost revenue on the capital markets side, Mr. Timmons suggested.

However, he said, the main motivation behind the sale is probably that the company does not want to pass up a profit opportunity. "There are times as a player in any financial asset when you may love the asset," Mr. Timmons said, "but at a certain price level you're looking a gift horse in the mouth if you don't capitalize on it."

Production woes are not unique to Fleet Mortgage. The Mortgage Bankers Association of America said it expects industrywide volume to total $979 billion this year, compared with $1.287 trillion last year.

"If we were in a $1.2 trillion market, we wouldn't be selling this servicing," Mr. Naryka said. Selling "always has been one way an integrated mortgage company that has production and servicing takes advantage of the cyclicality - by sometimes selling servicing to offset the drag production has caused because we have a much smaller market."

BayView Financial Trading Group is brokering the servicing package for Fleet. The Miami investment bank declined to comment.

The offering is split into four geographic segments, and Fleet will entertain bids on any or all of them, Mr. Naryka said.

He said he expects the sale to be completed by the end of May. Fleet has always been an aggressive buyer and seller of servicing, he added, and its portfolio should be back up to $150 billion by yearend.

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