Household International is preparing to close or restructure three mortgage units of Beneficial Corp. when it acquires the company, according to an internal memo.

Employees of Beneficial's mortgage operation were notified last week that two units will be shuttered and a third merged into Household's own operations.

Observers said the actions, which would eliminate about 300 jobs, represent the first stages of a plan to mold Beneficial to Household's strategy after the $8.65 billion merger between the specialty finance firms.

Household will shut Personal Mortgage Corp., Brewster, N.Y., Beneficial's direct marketing originator, and Beneficial Texas Mortgage Corp., Houston, the company's start-up Texas home equity organization, PMC president Allen L. Wehrhahn told employees in the memo.

In addition, Beneficial Mortgage Corp., a wholesale and servicing unit, will be merged into Household's operations.

"There will be significant downsizing and restructuring of functions and locations of our mortgage operations after completion of the sale in June," the memo said.

Beneficial would not comment, and Household spokespeople were not available.

Analysts said the closing of the two units would begin to reshape Beneficial's home loan origination network to more closely mirror its own.

"The Household way is to centralize underwriting and collections, and use the branch people for salespeople only," said Mark Alpert, analyst at BT Alex. Brown, New York.

Beneficial employees spend just one week a month selling loans, and the other three underwriting, marketing, and collecting. "It was one of the reasons they had low production per branch," he said.

Household has offered jobs to employees who are willing to relocate, the memo said, and is said to be possibly expanding other operations.

PMC was started by Beneficial in 1991 and made $200 million in loans last year. Beneficial Texas has 12 offices throughout Texas. Beneficial Mortgage Corp. has three locations nationwide. Volume figures for Beneficial Texas and Beneficial Mortgage were not readily available.

Beneficial had been trying to shift to more centralized operations, Mr. Alpert noted, but he said that change would take five years if Beneficial was still independent. "Now, it will take five months," he said.

Nonetheless, the frustration of those in units being closed was clear from Mr. Wehrhahn's memo.

"Profitability was headed up, delinquency has been trending downward, retail production has been at record levels," Mr. Wehrhahn said, all of which "makes the question of why this has to happen all the more compelling."

But Mr. Wehrhahn stressed again in the memo that Household is a "good company" that just has a "different take on their mortgage strategy."

Mr. Wehrhahn also notified employees that though he had been offered a "very nice" position with Household, he turned it down.

"My decision was based on where I am in my career and what I would like to be doing at this point, which I did not feel was compatible with the offer by Household," Mr. Wehrhahn wrote, though he went on to stress that Household was an "excellent company with a lot of opportunity."

Household and Beneficial released detailed severance pay information to mortgage employees on Friday. The merged company will offer 52 weeks of pay to vice presidents and higher, 39 weeks to directors, 26 weeks to district managers, 13 to managers or general managers, and four weeks for supervisors and below. In addition, all employees will receive one week of pay for every three years of service.

The severance package is "fairly consistent" with those offered in other financial services mergers, said Diane Posnak of Pearl Meyer & Partners, a New York executive compensation consultancy, though it is more typical to offer one week of pay for every year of service.

Household has said that severance and retention packages will cost the company $200 million. Household has said it would take aone-time charge of $1 billion for merger-related costs.

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