A new giant may have entered the mortgage servicing business. Lehman Brothers Holdings Inc., the New York investment bank, was expected Friday to announce the purchase of about $1.3 billion in servicing from Harbourton Mortgage Co. Lehman is expected to set up a mortgage servicing subsidiary, Aurora LLP., in Aurora, Col. Harbourton's servicing employees would remain with Lehman, sources said. Lehman has some experience in the mortgage servicing business, but this deal would give the firm a platform from which to build significant market share. The company previously has bought whole loans and hired other companies to administer them, said Nancy Hector, managing director for Bayview Financial Trading Group, a Miami mortgage investment banking firm. Bayview advised Harbourton in the transaction. Harbourton's parent, Harbourton Financial Services LP, has been liquidating the company because of a change in its tax status. This sale would complete the sale of the mortgage subsidiary. Harbourton sold $2.8 billion in servicing to Source One Mortgage Services last year and another $1.5 billion to GMAC Mortgage earlier this year. Harbourton also sold its wholesale lending operation to CrossLand Mortgage and a majority of its retail operations to an undisclosed buyer this year.
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