Green Tree Financial Corp. has fired about one-quarter of its home improvement account executives in what company officials say is a prelude to expanding the division.

The move raised eyebrows in the industry and prompted speculation that the St. Paul-based company could be leaving the home improvement business. Though acknowledging that it fired 25 of 90 account executives in the division, Green Tree says it has a long-term plan to increase staffing.

A leader in the manufactured-home market, Green Tree is involved in redoubling its commitment to home improvement lending, said John Dolphin, investor relations director. Green Tree is offering new home improvement loans, streamlining the division, and focusing on pricing, he said.

The layoffs are part of the normal review process for the company, Mr. Dolphin added. "We're totally dedicated to continue our position as the No. 1 home improvement lender," he said.

The move is to be expected from Green Tree, Dean Witter Reynolds analyst Paul Mackey said. "They're very entrepreneurial, and they don't carry around a lot of deadwood."

Green Tree may be cutting back on account representatives because its network of remodeling dealers has been set up in many parts of the country and loan officers are no longer needed, Mr. Mackey said. "You're not going to move some (displaced) good ol' boy from Florida up to Maine," he added.

Green Tree originates home improvement loans through more than 6,000 remodelers, the company said.

The home improvement market, at about $42 billion, is so fragmented that even the top lender makes only a small fraction of all loans, Mr. Mackey added.

Green Tree pulled in more than $626 million in home improvement loans in 1995, and has written $333 million of such loans in the first six months of this year.

The company has originated $1.9 billion in home improvement loans since it started the division in 1989, and is currently servicing $1.4 billion.

Originally, the majority of the company's home improvement lending was Title I loans, which are government secured. But the balance has shifted in recent years, Mr. Dolphin said, and now only a fraction of Green Tree's loans are Title One.

Home improvement lending is being touted by analysts as an untapped resource for lenders.

According to a recent National Association of Home Builders survey, the remodeling market was very stong in the second quarter of 1996 and should remain strong for the next six months.

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