HomeSide Lending Inc. is looking for a buyer for its Honolulu Mortgage Co.
HomeSide acquired the company last year, when it took on much of the mortgage business of Barnett Banks Inc.
It had hired Cohane Rafferty Securities Inc., Harrison, N.Y., to assist in finding a buyer or deciding on another strategy.
Honolulu Mortgage, with $340 million in originations last year and a $1.8 billion servicing portfolio, appears to be an attractive property, said an executive familiar with HomeSide's business. Because of the high property values in Hawaii, it has an average loan size of about $170,000, the source said.
The potential sale appears to be a tidying up of the business rather than a change of direction. Joe K. Pickett, chairman of Jacksonville, Fla.- based HomeSide, has said the company is intent on expansion and is expecting to originate some $16 billion in loans in the year through February 1997.
"We've said all along there a number of different ways to grow the organization," he commented.
In an interview last month, he emphasized the importance of acquisitions in HomeSide's expansion plans.
One problem with the Hawaiian unit appears to be the distance between Jacksonville and Honolulu - both geographically and culturally. Another is that the Hawaiian company's business is entirely retail, while HomeSide is mostly doing wholesale business.
The announcement by HomeSide said Honolulu Mortgage has 110 employees and its own secondary marketing and servicing capabilities. But a major force behind the formation of HomeSide from the mortgage businesses of Bank of Boston and Barnett Banks was a consolidation of servicing capabilities.
On the plus side, delinquencies in Hawaii are said to be exceptionally low, at least in part because of cultural attitudes toward debt. But the diverse culture and variety of local dialects make it hard for off- islanders to service loans.