servicing business as a buffer during rough times in the real estate market. The mortgage wholesaler, which serves 300 California credit unions, was socked when interest rates rose and loan production fell, and servicing appears a reliable source of revenue. "All of our servicing business is a cushion against lean production times such as we've been experiencing," said Stephen P. Renock 4th, president and chief executive of CU Mortgage, which is owned by 61 Golden State credit unions. The wholesale lender lost nearly $700,000 over its last two fiscal years as loan production slowed because of interest rate increases, company officials said at the California Credit Union League's annual convention Nov. 16. From May to October 1994, the company slashed staff from 80 to 33. CU Mortgage has become increasingly aggressive in subservicing credit union mortgages, officials said. About one-third of its $1.3 billion servicing portfolio is subservicing. Mr. Renock predicted that CU Mortgage will be able to pick up more subservicing business because new guidelines under the Real Estate Settlement Procedures Act may be too burdensome for small and medium-sized credit unions. The Pomona, Calif., company also has its eye on the $4 billion servicing portfolio of CUNA Mortgage Group. CU Mortgage made a bid to subservice the loans and was rejected, but Mr. Renock said the California group might get another shot at it as the mortgage operations of CUNA Mutual, which controls CUNA Mortgage, wind down.
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