Fund American Enterprises Holdings said it has received an unsolicited offer for its mortgage banking unit, Source One Mortgage Services.

Fund American hired Lehman Brothers to assist in evaluating the proposal.

"This process is in its preliminary stages, and Fund American is not committed to selling Source One," a company spokesman said last week. He declined to identify the bidder.

Shares of Fund American advanced strongly in early trading Friday, jumping $7 to $78.

Source One is the 11th-largest home loan servicer in the country, according to an American Banker survey, processing payments on $38.4 billion of mortgages. Loan originations totaled $11.4 billion in 1993.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.