GE Capital Mortgage Services, which has been on a shopping spree for servicing portfolios, made two big acquisitions in just two days last week.

First, GE bought a $6 billion servicing portfolio from AmSouth Bancorp. As much as $10 billion was reportedly for sale. The next day, Wachovia Corp. announced it was selling $9 billion in servicing to GE, a sale many insiders previously said would go to Chase Manhattan Bank.

No prices were announced, but industry sources said the two deals together could cost GE $200 million or more.

The expansion by GE set up an interesting race between it and Countrywide Credit Industries, Pasadena, Calif., for the rank of No. 1 in the servicing business. GE said the new volume put its portfolio at $110 billion. Countrywide recently reported its holdings at $118 billion. GE is considering a bid for the $75 billion portfolio that Prudential Home Mortgage has put on the market.

The acquisitions continue the consolidation trend in the home lending industry, with many lenders exiting the servicing sector while a few large players snap up their portfolios.

Arcs Mortgage Corp., a unit of Bank of New York Co., is one of those exiting the business. It has accepted a bid for its $9 billion servicing portfolio and is negotiating a contract, according to David Sambol, president of Countrywide's servicing brokerage unit. The unit has been representing Arcs in its search for a buyer.

Keycorp announced its departure from the business last year, and planned to sell its $24 billion servicing portfolio and other assets. NationsBank ended up as the buyer in February. Lenders leaving the business have cited increasing costs of servicing and the difficulty of staying competitive and profitable.

"Wachovia's decision to sell its servicing is in recognition of the continuing consolidation and intense competition in mortgage servicing," said Thomas W. Trotter, president of Wachovia Mortgage. He said Wachovia would continue to originate mortgages, an area with growth potential.

AmSouth will continue servicing the sold loans through June 30, and Wachovia will service the affected loans through early summer. AmSouth will also continue servicing the remaining $4 billion of mortgages in its loan portfolio.

Smith Barney was Wachovia's investment adviser and Salomon Brothers Inc. handled the sale for AmSouth.

AmSouth said it expects a second-quarter pretax gain of about $20 million to $25 million from the sale.

"We are pleased with the fair price of this transaction and plan to use the gain to continue the balance sheet restructuring and efficiency initiatives we have previously announced," said John W. Woods, chairman and chief executive officer at AmSouth.

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