Norwest Mortgage Inc., the nation's largest originator, agreed to buy the prime mortgage origination and escrow businesses of WMC Mortgage Corp.
Norwest is buying 46 mortgage branches and 17 escrow offices where about 750 people are employed. Terms of the deal were not disclosed but investment bankers valued the transaction at about $20 million.
WMC originated approximately $3 billion of "A" quality mortgages last year. About half of that volume was to home builders. Norwest is already the largest originator to home builders, with volume of $4.3 billion in 1997.
WMC Mortgage Corp., formerly Weyerhaeuser Mortgage, was sold last year by Weyerhaeuser Co. to Apollo Advisors LP, an investment firm run by renowned financier Leon Black.
In the last year, WMC has also sold the majority of its conventional loan servicing. Scott McAfee, president and chief executive of WMC, said proceeds from the sale to Norwest will be invested in WMC Equity Services, its rapidly growing subprime business. WMC Equity Services originated about $1.8 billion in 1997.