Fleet Mortgage Group, one of the industry's largest lenders, is planning to close as many as 30 of its 75 offices nationwide, according to an executive familiar with the company's program.
Fleet is the second of the five servicers with more than $100 billion in their portfolios at the end of 1995 to announce office-shutdown plans. Chase Manhattan's mortgage subsidiary told American Banker last month that it planned to eliminate duplications in its office network resulting from the Chemical Bank merger.
A third servicing giant, GE Capital Mortgage, left the retail business last year and also scaled back its wholesale business because of weak prices.
Fleet is closing the offices in part because it wants to focus on a core group of sites as it rolls out a $30 million branch automation system, said the executive, who declined to be named.
The new system will let Fleet automate application and processing tasks that loan officers have been handling with pen and paper, the executive said.
A representative of the mortgage company's parent, Fleet Financial Group, played down word of the closings.
"In some markets where the production is not economical, resources will be pulled out and put in other places," said James Mahoney, senior vice president at the parent.
Mr. Mahoney declined to discuss how many offices might be affected.
He did say the parent company "is committed" to expanding its mortgage business. In fact, originations this year are expected to grow to $22 billion, from $15.9 billion in 1995, Mr. Mahoney said.
The office closings are the latest shakeup at Fleet Mortgage. Last month, John T. Daly, its executive vice president for production, abruptly resigned after just a year on the job. Rather than filling the spot, Mr. Mahoney said, Fleet is leaning toward parceling out his responsibilities to other executives in the mortgage group.
Fleet is expected to begin closing mortgage offices this week. Eleven branches on the East Coast are near the top of the list, said the executive familiar with Fleet's plans.
Underperforming offices in smaller cities also are among the sites to be closed. Management attention was diverted from these branches during development of the automated system, the executive said.
Fleet will try to sell the offices and may go back to these areas in a couple of years when the new system is fully operational, the executive said.
The unit was the nation's third-largest originator of home loans last year and No. 4 in servicing, with $105.5 billion at yearend.
