MONTGOMERY, Ala.- Colonial Bancgroup said it has signed a letter of intent to sell the servicing rights on $5 billion of mortgages to Homeside Lending of Jacksonville, Fl.

The sale covers what is left of the banking company's servicing portfolio after its February agreement to sell the servicing rights on $9 billion of loans in February to undisclosed buyer. Market source at the time pointed to Chase Manhattan Morgage as the buyer.

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